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Hedge funds recorded their strongest inflows in a decade this week, with investors pouring $37 billion into the industry during the first half of 2025 despite mounting frustration over opaque fee structures. The paradox of record capital flows amid unprecedented fee pushback dominated discussions as major pension funds including Texas' $200 billion Teacher Retirement System and New Mexico's $17 billion pension plan threatened to walk away from funds imposing excessive charges. Meanwhile, "SPAC King" Chamath Palihapitiya staged his surprising return to blank-check markets with a $250 million vehicle targeting artificial intelligence and cryptocurrency sectors after a three-year hiatus.
Record Hedge Fund Flows Meet Fee Resistance
Investors added approximately $25 billion to hedge funds during the three months through June, bringing first-half net flows to more than $37 billion - the highest since 2015, according to Hedge Fund Research data. The influx came as BlackRock's research arm recommended investors increase hedge fund allocations by up to 5% from current levels, marking the institute's highest-ever recommendation for the asset class.
Hedge fund performance dipped slightly in July, the first blip in an otherwise positive year for the asset class, according to data from fund administrator Citco released August 21. Despite the modest pullback, event driven funds were top performers with a weighted average return of 2.7%, while fixed income arbitrage and global macro funds followed with 1.4% and 1.3% respectively. The data showed $16.4 billion of subscriptions and $6.1 billion of redemptions, resulting in net inflows of $10.3 billion for July, with multi-strategy funds taking $8.9 billion of net inflows.
The capital surge occurred despite growing investor revolt over fees. Texas' $20...................... To view our full article Click here |
Alternative Market Briefing Weekly
Saturday, August 23, 2025
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