- Sign up to free AFI briefing emails for exclusive industry updates and get ahead with AFI Intelligence membership
Hedge funds have proven resilient during a volatile period for markets, say leaders at SS&C as midyear approaches.
Jason Costa, head of hedge fund services, North America and Anthony Cerroni, managing director and global head of investor services at SS&C, commented on industry performance, flows and operational trends in an interview with AFI.
Performance
“It’s been a volatile year but hedge funds have proved resilient,” says Costa. “They’ve provided diversification from stock market declines. And allocators increasingly value the liquidity, especially given the challenges in some private strategies.”
Hedge funds have “done what they’re supposed to do,” adds Cerroni. “At a time when tracking the index is a risky strategy, downside protection is important. Risk-adjusted returns are key.”
The Windsor, CT-headquartered firm highlighted a fifth straight month of growth for hedge funds in its May report.
Flows
Cerroni, global head of investor services, pinpointed greater inflows from private wealth channels and increased interest from Canada as two trends which had caught his eye in 2025.
“We’re seeing expansion into more retail-based type structures. Wealth management channels are starting to put more money into alternatives. The individual tickets are smaller but it adds up to a pretty substantial trend overall.
“We’ve seen a pickup in the market in Canada as well. We’ve a few managers opening up feeder funds and looking to tap that private wealth channel in Canada as well.”
SMA trend
“In the emerging manager space, what we are seeing is more separately managed accounts (SMAs),” says Costa. “A lot of the new allocators are coming from the multi-managers investing externally. All of the benefits around transparency and control have been boosted by the capital efficiency benefits in this higher rate environment.”
Cerroni adds: “From an operational perspective, you get all the benefits of strong customer reporting. investors feel like they’re having more of a say in their investment. So not only is it a good way for startup and emerging managers to build up their book and performance, it’s also giving them a way to tie in their performance to fees.”
Operational insights
“The other strong trend that we’re seeing is for those managers who’ve been doing a full shadow admin in-house, they’re looking more to us for that,” says Costa.
“And looking to us to perform other functions through business process outsourcing, ultimately building an operating model or an oversight for them based on our data as opposed to a full shadow. I think we’ve seen a lot of interest in that this year.”