A small group of hedge funds snapped up gilts at rock-bottom prices hours before the Bank of England announced an extraordinary bond-purchase program two years ago to stem a fire sale, according to research from the central bank.
Hedge funds bought £3.8 billion ($4.9 billion) of UK bonds in the hours leading to the BOE’s announcement on Sept. 28 2022, which went on to trigger the greatest one-day rally in long-maturity gilts on record. The bulk of the purchases that morning were made by a limited number of hedge funds, the researchers said.