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From Kirsten Bischoff, Opalesque New York:

Hedge fund driven trade volume in fixed income is down significantly even as volume in the strategy has increased 15% during this year (according to US based research firm Greenwich Associates). Hedge funds stopped generating 40% of their typical trade volume as compared to 2007-2008. This dropped hedge funds' total share participation of overall fixed income trade volume from 20% to 12%.

For NJ-based fixed income relative value hedge fund Barnegat Fund Management the disappearance of competition has been notable and unnerving, providing an increase in opportunities, but making asset raising difficult.

"[As a fund] We are able to maintain quite a high threshold for initiating a trade, but with no competition we are finding more trades that fit these criteria," Portfolio Manager Robert Treue told Opalesque.

As a relative value fund, Barnegat looks to make gains by taking advantage of the mispricings that can occur in related securities. Treue uses the example of the buyback of more than 25% of outstanding Gilt issuances by the Bank of England and the issuance of 25% outstanding gilt issuance the UK Treasury will sell this year. "They are not allowed to trade with each other, or to issue and buyback the same bonds on the same days," Treue explains. "These flows are massive and without any competition, we ......................

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