A little-known New York hedge fund run by a former Yale University math whiz has been buying tens of billions of dollars of US Treasury debt at recent auctions, drawing attention from the Treasury Department and Wall Street.

Element Capital Management, led by trader Jeffrey Talpins, has been the largest purchaser in dozens of government bond auctions over the past 10 months, people familiar with the matter said. The buying is part of an apparent effort by the fund to use borrowed money to exploit small inefficiencies in the world's most liquid securities market, a strategy that is delivering sizable profits, said people close to the matter.