IMF: “Global hedge fund assets surge to $13 trillion ... risks of undue influence, including in U.S. Treasuries, grow”

[Financial News] Hedge fund assets worldwide have grown to at least three times their size 13 years ago, extending their influence to the U.S. Treasury market. Warnings have emerged that the risks they pose to financial markets and the potential for shocks have grown as a result.
In its Global Financial Stability Report (GFSR), released on the 6th (local time), the IMF warned that hedge fund assets had increased from about $4 trillion in 2013 to about $13 trillion in early 2026. In particular, concerns have been raised that hedge funds’ use of leverage—borrowing to invest—to expand their influence into the U.S. Treasury market could amplify market shocks.
The full report will be released on the 13th.
Hedge funds have come to play increasingly important roles in financial markets, including in trading, liquidity provision and risk transfer. The IMF noted that much of the sector’s rapid growth was driven not by an increase in its own capital, but by greater leverage.
The IMF’s assessment is that as hedge funds have become key providers of liquidity in financial markets, both their role in contributing to market stability and the risk that they could amplify shocks during a crisis have grown.


The U.S. Treasury market is where hedge funds’ influence has grown particularly quickly. According to the IMF, hedge funds’ share of the U.S. Treasury market rose from 4% in 2022 to 9% in 2025.
Reuters reported that hedge funds actively use so-called “synthetic leverage” through derivatives, in addition to borrowing money directly. This allows them to build much larger positions with relatively little of their own capital and boost returns, but if markets move against them, losses can mount just as quickly.
Greater hedge fund participation can increase trading volumes and provide liquidity in normal times, improving market efficiency. But if markets shift sharply, high leverage may lead funds to liquidate positions all at once, amplifying declines in bond prices and rises in interest rates.
The IMF warned that, given hedge funds’ growing influence in the U.S. Treasury market, their efforts to reduce leverage could become a new source of instability if interest rates surge or market volatility increases.
The IMF cited opacity as another risk posed by hedge funds. They are less regulated than traditional financial firms such as banks, and outsiders find it difficult to determine their investment positions and degree of risk exposure.
The IMF said hedge funds are “inherently opaque” and noted that available data alone make it difficult to accurately measure how much risk they are taking on.
The IMF therefore recommended that policymakers in each country fill gaps in hedge fund data and strengthen monitoring of leverage and risk exposure.

[email protected] Lee Seok-woo, International Affairs Correspondent Reporter