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Global hedge funds posted their best returns in more than a decade last year, with discretionary macro standing out by hitting highs last seen in 2009.
New PivotalPath research outlines the extent of gains across strategies, with its composite index up 11.9% (the highest since 14.7% in 2013).
“Clear dispersion in markets and geopolitics supported significant out-performance across both equity-centric and discretionary global macro strategies,” according to the New York’s firm latest research note.
“Manager skill was given a helping hand by the almost record levels of leverage that amplified returns and that peaked as we hit year end.”
AFI rounds up the main strategy outcomes and PivotalPath’s perspective on the next 12 months
Global macro (+10.2% in 2025)
The global macro composite edged into double-figures, but the standout performance was by discretionary global macro, making 17.9% – the highest since 2009.
“[2025 delivered] discretionary macro a full opportunity set as rates became path-dependent, FX diverged, and energy/geopolitics repeatedly repriced risk. All great conditions for cross-asset trading,” reported PivotalPath.
PP’s outlook: In 2026, macro should stay fertile if policy and politics keep producing tradable crosscurrents.
Multi-strategy (+10.6%)
December saw steady growth, with a 1.4% gain to end the year, and avoiding self-inflicted wounds at multi-strategy firms. ExodusPoint outperformed with its best year since launch in 2018.
“Platforms continued to broaden the mix of return engines, dialing down same-trade exposure and leaning into pods where outcomes were more stock-specific,” reported PivotalPath.
PP’s outlook: In 2026 the winners will be the platforms that can keep diversification real.
Equity long/short (+15.5% diversified, +24.2% sector-specific)
Long/short equity was another big winner in 2025, with healthcare stealing the show on the sector-specific side. Crowding represents a risk.
PP’s outlook: In 2026, dispersion will continue to be a friend, especially if index returns become harder-earned.
Managed futures (-1.1%)
The only main strategy group to decline in 2025, as declines on trend-reversals in the first half of the year were almost clawed back during the recovery in H2.
PP’s outlook: In 2026, managed futures should do best if rates and FX trends stay persistent, turning a choppy 2025 into a year where CTAs can finally stay in the trade long enough to compound.
Credit (+7.8%)
Hedge funds closed out a respectable year of gains, on average, in December when the core posture remained carry-first, with a growing respect for tail risk given tight spreads and year-end liquidity quirks.
PP’s outlook: In 2026, carry with protection will remain the mood music for credit.
Event-driven (+12.8%)
One of two main strategy groupings upgraded by Man Group’s external investments team. “M&A activity continues to increase dramatically, with announced deals up over 65% on a year-on-year basis,” said Adam Singleton, CIO of external alpha.
“The US looks particularly strong, with an increased urgency for firms to contemplate more aggressive deals under the current Trump administration.”
PP’s outlook: In 2026, the anticipation is that pipeline could improve if financing stays functional, but selectivity will still remain a virtue.