World’s Safest Market Becomes a Magnet for Big Investors

“The new buyers—whether you consider them a sign of healthy markets or call them vigilantes, as they were dubbed in the 1990s, the last time hedge funds got this charged about US government debt—are probably here to stay. Hedge funds have tripled their holdings of Treasuries to a record $2.3 trillion in the past year, Fed data show. New funds are being rolled out at the fastest level in more than a year, according to analytics firm Hedge Fund Research, and strategies designed to exploit price dislocations in bond markets are among the most plentiful. That’s leading to a hiring binge in the field, says Christian Hauff, chief executive officer at Quantitative Brokers, which sells trading programs to big-money investors. “They’re looking for more talent,” he says. “We have seen the movement of traders and portfolio managers from asset managers and banks to these hedge funds.”