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Alternative Market Briefing

Hedge fund performance down slightly in an otherwise positive year

Thursday, August 21, 2025

Bailey McCann, Opalesque New York:

Hedge fund performance dipped slightly in July, the first blip in an otherwise positive year for the asset class, according to the latest data from fund administrator Citco.

Event driven funds were the top performers in July with a weighted average return of 2.7%. Fixed income arbitrage and global macro funds followed close behind with a weighted average return of 1.4% and 1.3% respectively. Meanwhile, equities saw more muted returns at 0.6%.

The only strategy in negative territory for the month was Commodities at -1.7%.

On an Assets under Administration (AUA) basis, the majority of AUA buckets were positive, with only funds between $200-500m experiencing a negative weighted return at -0.1%.

Despite the drop in performance, investors are pivoting back to hedge funds and putting capital into most major strategies. Overall, there was $16.4bn of subscriptions and $6.1bn of redemptions, resulting in net inflow of $10.3bn, Citco's data shows. Year to date capital flows are also positive at $29.7bn. Multi-Strategy funds took further net inflows in July at $8.9bn, taking their year to date tally to $25.3bn of net inflows - ahead of all other strategy types.

On an AUA basis, the current trend of inflows into larger funds continued, as funds with more than $10bn+ of AUA had net inflows of $6.9bn in July, taking them to $27.7bn of net inflows year to date.

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