2024 was a defining year for hedge funds, with market volatility, shifting investor sentiment, and evolving regulatory landscapes shaping industry performance. As we enter 2025, understanding these trends is key to identifying opportunities and overcoming new challenges.
Our latest Hedge Fund Trends 2025 report includes:
· Performance Insights
· Winning Strategies
· Investor Sentiment
· Emerging Opportunities
· Challenges to Watch
Key Highlights from 2024
- Hedge funds achieved a 9.83% return, though lagging the S&P 500’s 23.3% surge.
- The industry’s total AUM grew to $4.51 trillion, marking the largest annual increase since 2021.
- Macro funds capitalized on volatility, with some delivering over 50% returns.
- Merger arbitrage thrived, benefiting from an active M&A environment.
- Quant strategies leveraged AI to enhance performance, but faced mixed results in Q3.
What to Expect in 2025?
? Higher volatility could create alpha-generating opportunities for hedge funds with tactical strategies. ? Institutional interest is growing, with 36% of allocators planning to commit fresh capital. ? Regulatory changes are increasing transparency demands, requiring funds to adapt. ? Digital assets and AI-driven trading are set to play a bigger role in fund strategies.
Download the full report for a deep dive into these insights here: https://www.paragonalpha.com/report/hedge-funds-in-2025
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