LONDON, June 16 (Reuters) - The rising influence of hedge funds is the biggest trend in government bond markets and Canada’s concerns about them have mellowed, senior debt management official Matt Emde said on Tuesday, although he said the highly active investors still pose risks.

• Hedge funds were largely absent in Canada’s market a decade ago, but now take 30% to 50% of debt issued at auction, Emde, director general at the Canadian department of finance, told a Financial Times conference in London.

• “It is the biggest trend in our markets… It's huge,” he said. “A year or so ago we were fairly concerned, but our views have evolved, and they're more nuanced now. I think what we've seen is that hedge funds are not fast, flighty money.”

• Hedge funds have become dominant players in the European bond markets, Reuters has reported, with some analysts citing concerns that these "fast money" investors could make markets more volatile.

• Emde said hedge funds are fulfilling some of the roles of dealers in the bond market: “They're coming in toward auctions, buying up large amounts, they warehouse them for some period, sell it in the secondary. So they're providing liquidity to our markets.”

• Yet he added: “There's clearly a concentration risk. There's this class of investors who are way more active, perhaps they'll move in concert, some herd mentality at some point, that could be negative for our market."