- Top multi-strategy and macro hedge funds posted strong 2025 gains led by Bridgewater Pure Alpha (~33-34%), D.E. Shaw Oculus (~28%) and Composite (~18.5%), plus Balyasny (~16.7%) and Point72 (~17.5%).
- AQR also outperformed with Apex (~19.6%) and Helix (~18.6%), while Citadel Wellington (~10.2%) and Millennium (~10.5%) lagged the peer group.
- Returns were supported by a ~16% S&P 500 rise, an AI-driven equity rally, and trade-policy volatility that created cross-asset opportunities.
- Record inflows and upbeat allocator sentiment heading into 2026 reflect expectations for continued opportunities in volatility, AI, and macro positioning.
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The 2025 hedge fund landscape was characterized by broad outperformance from large multi‐strategy and macro managers, particularly those who could flex exposure across equities, macro, and trend strategies. Bridgewater holds the distinction of delivering the highest profits in its history through its Pure Alpha fund (~33-34%) and strong returns in its other regional and macro strategies. D.E. Shaw similarly posted strong results: its Oculus fund approached 28.2%, and its Composite fund ~18.5%.
Mid-sized hedge funds also had a standout year. Balyasny and Point72 returned 16.7% and 17.5%, respectively. AQR was a particularly strong performer, with its multi‐strategy Apex and alternative trend‐following Helix funds returning ~19.6% and ~18.6%. These returns materially outpaced major index returns and systematic trend indices.
Not every major fund kept pace. Citadel’s Wellington fund (10.2%) and Millennium (10.5%) delivered solid, positive returns, but lagged peers by ~6-8 percentage points. This performance gap suggests that scale, strategy mix, nimbleness, or sector exposure played roles in determining alpha.
Market drivers were orderly but powerful: a ~16% rise in the S&P 500; surging interest in AI‐related equities; high volatility spurred by trade policy (especially under the Trump administration); cross‐asset dislocations that benefitted macro and trend strategies. Funds that could manage macro themes, volatility, and technology momentum excelled.
Strategic implications include:
- Allocators may increasingly favor mid-sized firms or those with flexibility to adapt to volatile macro and regulatory regimes.
- AI has become a structural tailwind—not just a theme—but a driver across tech, strategy, and sentiment; managers who integrate AI tools or focus on AI beneficiaries stand to gain.
- Scale and fees remain double‐edged: large funds must manage drag from size, regulatory exposure, and policy risk. Indeed, some lagging names show that size is no guarantee of outperformance.
- Volatility remains a source of opportunity—with trade policy, fiscal shifts, and global economic divergence likely to drive returns in macro, trend, and multi‐strategy funds in 2026.
Open questions remain: To what extent can these high returns persist if policy volatility diminishes? How sustainable are AI euphoria and its valuation premia? Will crowding hurt trend and macro strategies? And how will fee compression and regulatory scrutiny evolve, especially given record assets under management?
Supporting Notes
- Bridgewater’s Pure Alpha fund surged ~33-34% in 2025, its most profitable year ever.
- D.E. Shaw’s Oculus Fund returned ~28.2% net, its Composite ~18.5%, annualized since inception at ~14.4% and ~12.9%, respectively.
- Balyasny posted ~16.7%, Point72 ~17.5%.
- AQR’s Apex strategy +19.6%, Helix +18.6%, Delphi Long-Short Equity +16.8%.
- Citadel’s Wellington fund delivered ~10.2%; Millennium ~10.5%—solid but behind the top-tier peer group.
- S&P 500 rose ~16% in 2025; U.S. equity market strength and AI-focused stocks contributed significantly.
- Hedge funds saw record asset inflows, and allocator sentiment remained strongly positive entering 2026.