The assets under the management of the hedge fund industry reached $4.51 trillion last year.
The mentioned information was published on Friday, January 24, by the research company HFR. It is worth noting that the indicator recorded last year is 9.75% higher than the figure for 2023.
Total assets increased by $401.4 billion in 2024. This indicator is the highest since 2021. The corresponding result is largely related to a strong performance across different strategies.
The growth of hedge fund assets is evidence of the significant impact that this less regulated and leveraged industry has on the markets. It is worth noting separately that the mentioned industry uses a vast array of trading strategies and assets.
The figure recorded last year also signals that hedge funds have regained some popularity among investors. In this case, net inflows totaled $10.47 billion in 2024. Also, for the first time since 2021, the first calendar year was recorded during which more money came in the industry than out of it. At the same time, outflows totaled $12.57 billion in the last quarter of 2024.
Since 2015, hedge fund assets have grown by almost 56%. The industry has struggled to lure new money from investors. Over the past decade, outflows have exceeded inflows by $166.8 billion. This means that the growth of the industry is related to the performance of funds, not new money.
According to the HFRI Fund Weighted Composite index, on average in 2024, hedge funds posted a 9.83% gain to investors. In this case, there is an impact from positive results in equity, macro, event-driven, and relative value strategies.
Kenneth J. Heinz, president of HFR, stated that portfolio managers are preparing for a wide range of market cycles with the potential for volatility and dislocations as investors adapt to new policies regarding interest rates, inflation, legislation, and tariffs in 2025. It was also noted that the total capital of the global hedge fund industry rose to the fifth consecutive quarterly record. In this context, it was underlined that managers, investors, and institutions are positioned for sweeping policy changes, which are likely to have significant and far-reaching implications for the US and global financial market structure, regulation, and capital.
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