Hedge funds' future: Can they regain traction with institutional investors?

100 Days Challenge on Business , Strategy and Product Marketing topics and their case studies Day 46 : 🫠 Topic of the Day: Demystifying the Hedge Fund Industry: Past, Present & Future The hedge fund industry has long been a cornerstone of alternative investments, known for its agility, innovation, and ability to generate alpha in volatile markets. But what exactly is a hedge fund—and where is the industry headed? What Is a Hedge Fund? A hedge fund is a pooled investment vehicle that employs diverse strategies to earn active returns for its investors. Unlike mutual funds, hedge funds often use leverage, derivatives, short selling, and other complex instruments to hedge risks and exploit market inefficiencies. How Do Hedge Funds Operate? Hedge funds typically cater to institutional investors and high-net-worth individuals. They charge a management fee (usually 2%) and a performance fee (often 20%)—the classic "2 and 20" model. Strategies range from long/short equity and global macro to event-driven and quant-based approaches. Their flexibility allows them to adapt quickly to changing market conditions. Big Players in the Game Some of the most influential hedge funds include: Bridgewater Associates (Ray Dalio): Known for macroeconomic insights and risk parity strategies. Renaissance Technologies (Jim Simons): A pioneer in quantitative trading. Citadel (Ken Griffin): A multi-strategy powerhouse with deep market penetration. Man Group: The largest publicly traded hedge fund firm globally. These firms exemplify strong fundamentals: robust risk management, data-driven decision-making, and relentless innovation. Industry Fundamentals & Growth As of 2025, the global hedge fund market is valued at $5.87 trillion, projected to reach $11.05 trillion by 2030, growing at a 10.8% CAGR. North America remains the largest market, while Asia Pacific is the fastest-growing region. The sector saw strong performance in 2024 and early 2025, with long-biased strategies leading the way. The Future of Hedge Funds The future looks promising yet challenging. Investors are increasingly demanding transparency, ESG integration, and lower fees. AI and machine learning are reshaping strategy development, while regulatory scrutiny continues to evolve. Hedge funds that embrace tech, diversify strategies, and align with investor values will thrive. #HedgeFunds #AlternativeInvestments #FinanceInsights #InvestmentStrategy #QuantFinance #RayDalio #JimSimons #KenGriffin #ESGInvesting #AIinFinance #LinkedInFinance #CapitalMarkets #FutureOfFinance #FinancialServices #AssetManagement

Why are the world's top hedge fund traders breaking away to launch standalone funds — and what does it mean for market dynamics in 2026? In the relentless pursuit of alpha, the hedge fund landscape is seeing a new wave of industry titans forging their own paths. One of the most compelling recent moves is Soren Gandrud’s launch of Jones Hill Capital, backed by $12 billion Walleye Capital, signaling that even the most successful multistrat funds can't hold all the top talent. This move is not just a career milestone for Gandrud, but a broader market signal about the evolving nature of hedge fund capital allocation. Big firms increasingly back external managers with proven track records, allowing specialized strategies to thrive independently while accessing scale and infrastructure. From a capital markets perspective, this trend points to a more fragmented yet more flexible alpha generation environment, where nimble, expert-led teams operate with autonomy but benefit from institutional capital's weight. Investors should watch for heightened innovation particularly in niche sectors like healthcare, where Gandrud’s expertise lies, and anticipate a more competitive talent war shaping 2026’s hedge fund landscape. For institutional investors, this means more opportunities for tailored exposure and co-investment in differentiated strategies but also necessitates rigorous due diligence as the manager universe diversifies rapidly. The takeaway is clear — adaptability and selectivity in manager partnerships will be critical. Alpha today lives at the intersection of elite talent, institutional capital, and strategic autonomy. #HedgeFundStrategy #CapitalMarkets #AlphaGeneration #PrivateEquity #InvestmentStrategy #MarketTrends #FinanceLeadership #HealthcareInvesting #citadel #millenium

Harvard's endowment navigated a challenging landscape in the past year, driven by strong equity performance and strategic hedge fund selection. With a reported return of 11.9%, the $56.9 billion portfolio is shifting towards greater equity exposure. Explore how these decisions impact long-term performance. #InstitutionalInvesting #HedgeFunds https://okt.to/Yo3PRW

Harvard's endowment navigated a challenging landscape in the past year, driven by strong equity performance and strategic hedge fund selection. With a reported return of 11.9%, the $56.9 billion portfolio is shifting towards greater equity exposure. Explore how these decisions impact long-term performance. #InstitutionalInvesting #HedgeFunds https://okt.to/xX5ha3

Calamos Investments and Aksia Launch Third Interval Fund, Expanding AC Private Markets Partnership: Hedged Strategies Fund ($HEDGX) Offers Curated Portfolio of Hedge Funds https://lnkd.in/eWQS7Tna

➡️ Good piece here from Will Wainewright. Is the Hedge Fund map being redrawn? My thoughts from an eFX platform angle: 🌍 Latin America is becoming too big to ignore. Brazil’s capital markets are deepening, investors are more sophisticated, and regional opportunities are diverse — from Milei’s macro experiment in Argentina to commodity-linked plays across the Andes. Being “on the ground” is no longer optional for global multi-strats. Some multi dealer platforms (mdp) already in the region. 🌍 Asia-Pacific is reshuffling. Hong Kong perhaps no longer the place to be for HF sales: 🟠 Singapore: preferred home for multi-strats 🟠 Japan: boosted by governance reforms and central bank divergence 🟠 Australia: building out around its vast superannuation system 🟠 Dubai/Abu Dhabi: capital-rich and aggressively positioning as financial centers The bigger picture? Hedge fund geography is fragmenting. Instead of clustering in a few hubs, firms are planting flags across regions to capture local edge and manage geopolitical risk. The nimbler eFX platforms will jump on this.

Last week, Saxo hosted its “How to Start a Hedge Fund” event in Singapore, bringing together fund managers, industry professionals, and VIP clients for an evening of candid insights and discussions. We were privileged to hear from Wilson Er of Vulpes Investment Management and Marcelo García Casil of Menaris Capital, who shared first-hand experiences of setting up and operating a fund. Their reflections offered valuable learnings for both aspiring and established managers: 🔹 Before the Fund: Starting from conviction, not comfort 🔹 Fund Formation: Anticipating delays and staying proactive to avoid compliance issues 🔹 Strategy & Edge: Building differentiation through process, clarity, and conviction 🔹 Capital Raising: Recognizing that early investors are ultimately betting on the manager It was inspiring to see such strong engagement from the community, including many of our Saxo Singapore VIP clients, reflecting the growing interest in the hedge fund space.   #SaxoVIP #SaxoSingapore #SaxoInstitutional #HedgeFund #FundManager

🗽Boaz Weinstein's US hedge fund Saba Capital Management, L.P. is set to enter Europe's active ETF market with a strategy targeting UK investment trust discounts. The firm has a $315m closed-end fund ETF listed in the US. ETF Stream: The home of European ETFs

Can you invest in Hedge Funds ? Imagine you found a secret finance toolbox that only a few people are allowed to open. Inside are tools like short-selling, leverage, derivatives, and special-fee contracts, tools some professionals use to make big returns. That's a HEDGE FUND. A hedge fund is basically a private investment fund whose money is pooled and managed by professional fund managers. These managers use various strategies to make above-average returns. In India, SEBI introduced hedge funds in 2012 under the SEBI Alternative Investment Funds (AIF) Regulations. When compared to global markets, hedge funds in India are still very new & growing. They are regulated as Category III AIFs by SEBI and are open only to HNIs and institutions. Minimum investment of ₹1 cr. per investor is must, while the entire fund must have a minimum corpus of ₹20 cr. Hedge Funds pool money from large investors like HNIs, banks, pension funds, commercial firms etc. and invest in multiple securities in national and international markets. The fund manager often hedges the fund’s positions to protect them from market risk. They do this by investing some of the money in securities whose prices move in the opposite direction of the fund’s core holdings. So, if the core holdings' prices drop, the securities' prices should rise so that any losses in the core holdings can be minimised. There are reasons why hedge funds are not open to retail investors: ▶️ They are highly-risky and have low liquidity, plus have longer lock-in periods. ▶️ Also hedge funds charge higher fees than conventional investment funds. Hedge funds are like mutual funds only. The difference is in there investment strategies & investing freedom. 🔸 Hedge funds are permitted to do short selling, meanwhile mutual funds cannot do short selling. 🔸 HFs are not required to get registered under SEBI, but MFs' registration under SEBI is mandatory. 🔸 HFs can invest in unlisted shares, whereas MFs cannot invest in unlisted shares. In short, Hedge funds are like mutual funds with far more freedom, but that freedom comes with much higher risk. Currently, Citadel is the largest hedge fund in the world. Will you invest in Hedge Funds if SEBI allows for retail investors someday or you are a Mutual Fund person❓ Share your thoughts in comments. Also, save this post for later. Follow Abhishek Singh for more such posts. #HedgeFunds #Investing #Finance #Investment #StockMarket #SEBI #IndianEconomy

Our recent participation in the Hedge Funds Club event in Singapore offered timely insights into how the hedge fund landscape is evolving across APAC. The overarching tone from allocators and managers was one of measured optimism. Returns are positive YTD, flows have turned net positive, and there's growing appetite for 2025.   But the picture remains nuanced, dispersion is wide, and macro left-tail risks continue to loom. In this regime, strategy and manager selection (and wrapper selection within wealth channels) are proving far more decisive than any simplistic “HF vs. 60/40” allocation debate.   In parallel conversations, private equity players expressed concern over ongoing capital raising challenges. Despite an environment that should favour APAC private markets, many LPs remain sidelined. The capital freeze and elevated liquidity needs are keeping new funds on pause while existing dry powder waits to be deployed.   At Saxo, we continue to support hedge funds navigating this complex landscape with access to multi-asset execution, cross-collateralized accounts, and institutional-grade platforms built to scale.   Explore our hedge fund solutions here: 👉 https://lnkd.in/gvpx6vMx #HedgeFunds #InstitutionalTrading #FundManagers #AlternativeInvestments #SaxoInstitutional