Morgan Stanley sees the elephants in the room

Talking Heads 2025: Hedge fund crowding means macro markets have fatter tails, argues fixed income co-head Jakob Horder

As hedge funds have ballooned in recent years, so has their footprint in the few markets large enough to accommodate them. This isn’t a problem when their trades are going well. When those trades backfire, though, it can be a different story – particularly if multiple funds are holding the same position and all try to cut at once.

“That’s why we’re having a one-in-100-year event every five years,”