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Hedge funds may exacerbate credit risk -Fitch

LONDON, July 19 (Reuters) - The rise of hedge funds in the credit markets has forged links between previously unrelated segments, creating a risk that trouble in one area of the market could spread faster to others, Fitch Ratings warned on Tuesday. The credit ratings agency said hedge funds were an important source of capital to the market and could promote liquidity and diffuse credit risk, but it was concerned that the behaviour of these investment vehicles may exacerbate risks.