Hedge funds are getting bigger - both in the sense of larger market share, and individual size. Fitch points out in a new report that they are particularly poresent in the credit derivatives market, where they're responsible for 60% of trading, and assets - thanks to high levels of leverage - worth as much as $1.8 trillion. Not only that, but according to SG CIB's Bruno Lebre, head of hedge fund relations, whom I met earlier this week, they're increasingly consolidating.

"The entry costs are high; diversification into multiple asset classes requires large size". The shift towards institutional investors rather than rich private investors - institutions are now responsible for more than 50% of hedge fund assets - mean that compliance and back-office costs have gone way up in order to satisfy their greater demand for information.

"Concentration risk isn't an issue today, but it could be in five years' time", said Lebre's colleague Dan Fields, the bank's head of flow sales.

Fitch reckons the biggest problem this poses is liquidity risk - the trouble about having lots of highly mobile investors (like hedge funds) investing in your sector is that, when things go wrong, you may not see their highly mobile shapes for dust. Brace for reassessments of liquidity risk.