Hedge funds are seen as the winners over traditional asset managers if the time shall come when the fixed-income boom in Europe fizzles, according to a survey of market participants by Greenwich Associates. "Institutions voiced concerns about credit risk and other risks associated with the credit derivatives business. When the concerns are borne out, investors will rely on the strength of their dealer relationships withstand a downturn." Then comes the clincher. "Unfortunately, it is these sell-side resources that are becoming more difficult for traditional managers to secure as hedge funds expand their reach." The reason, according to Greenwich, is that traditional fund managers are more sensitive to costs associated with sell-side services. Besides, says Greenwich, hedge funds grabbed more than 50% of the volume in the most profitable fixed-income offerings, and that has captured the attention and imagination of banks. "As Europe’s fixed-income dealers devote more resources to hedge fund clients, traditional long-only fund managers risk losing out on research, liquidity and other valuable sells-side services." Fixed-income is already losing ground big time to HFs; it’s grown 8% in the past 12 months, while hedge fund trading volume in cash bonds and derivatives has zoomed more than 200% during that same period.