Hedge funds managed an estimated 5.64 trillion dollars at the end of September 2026, the highest total on record. The second quarter alone added 409.3 billion dollars, the largest quarterly increase ever measured, and investors put a net 124.1 billion dollars of new money into hedge funds over the first nine months of the year.
Those totals come from HFR, a Chicago firm that compiles hedge fund indices and industry data. Other counts put the industry at anything from 4.6 trillion to 13.9 trillion dollars, depending on what they measure and which funds they can see.
Hedge fund industry size, flows and fees in 2026
- Total assets
- 5.64 trillion dollars at September 30, 2026, up 480 billion dollars since the end of 2025.
- Net investor inflows
- 124.1 billion dollars in the first three quarters of 2026, after 115.8 billion dollars in 2025, the strongest calendar year for inflows since 2007.
- Returns
- The HFRI Fund Weighted Composite, an equal-weighted index of the funds reporting to HFR, gained 12.5% in 2025, its best year since 2009. In 2026 it rose 7.5% in the first half and lost 0.6% in the third quarter.
- Launches and liquidations
- 561 funds launched and 287 closed in 2025. In the first half of 2026, 266 launched and 199 closed.
- Average fees
- A 1.32% management fee and a 15.74% incentive fee in the second quarter of 2026.
- Number of funds
- SEC-registered advisers reported 9,940 hedge funds on Form PF for the third quarter of 2025.
- Concentration
- Firms managing more than 5 billion dollars received 113.7 billion dollars of the 124.1 billion dollars of net inflows in 2026 through September, or 92%.
Why estimates of hedge fund assets disagree
Hedge funds do not publish their assets, and no single body counts all of them.
| Source | What it measures | Date | Amount |
|---|---|---|---|
| HFR | Total industry capital, estimated from its database | September 30, 2026 | 5.64 trillion dollars |
| HFR | Total industry capital | December 31, 2025 | 5.15 trillion dollars |
| With Intelligence | Estimated global industry assets | December 31, 2025 | 4.6 trillion dollars |
| SEC, Form PF | Net asset value of 9,940 hedge funds | September 30, 2025 | 5.86 trillion dollars |
| SEC, Form PF | Gross asset value of the same funds | September 30, 2025 | 13.92 trillion dollars |
Net assets are the investors' money: what the fund would be worth if it sold everything and repaid its loans. Gross assets are the full balance sheet, including positions bought with borrowed money. In the SEC's Form PF statistics for the third quarter of 2025, hedge fund gross assets were 2.4 times net assets, and borrowings equaled 54.4% of gross assets, up from 44.5% two years earlier. Data vendors such as HFR and With Intelligence measure net assets, which is why their totals sit far below the 13.9 trillion dollar gross figure.
Commercial databases depend on funds choosing to report to them, and many large funds never do. Form PF is mandatory but only for SEC-registered advisers with at least 150 million dollars in private fund assets, so it misses small managers and advisers that are not registered with the SEC. When researchers at the Office of Financial Research combined several vendor databases with Form PF filings, they estimated hedge fund net assets of at least 5.0 trillion dollars at the end of 2016, about 37% more than the most generous estimate then in circulation. Published estimates for that date ranged from 2.3 to 3.7 trillion dollars. Gross assets exceeded 8.3 trillion dollars.
Hedge funds also invest in other hedge funds, through funds of funds and feeder structures. In Form PF data, other private funds own 20.4% of the net assets of the largest hedge funds, so adding up every fund's assets counts part of that money twice.
Hedge fund assets since 1990
Hedge funds managed about 39 billion dollars in 1990, the first year of HFR's annual series. Assets passed 1 trillion dollars in 2005, 3 trillion in 2016, 4 trillion in 2021 and 5 trillion in 2025.
| Year-end | Assets, billion dollars | Net investor flows in the year, billion dollars |
|---|---|---|
| 2000 | 491 | +23.3 |
| 2005 | 1,105 | +46.9 |
| 2007 | 1,868 | +194.5 |
| 2008 | 1,407 | -154.5 |
| 2009 | 1,600 | -131.2 |
| 2013 | 2,628 | +63.8 |
| 2016 | 3,018 | -70.1 |
| 2019 | 3,324 | -43.1 |
| 2021 | 4,008 | +15.1 |
| 2022 | 3,828 | -55.4 |
| 2023 | 4,113 | -9.5 |
| 2024 | 4,510 | +10.5 |
| 2025 | 5,150 | +115.8 |
| September 2026 | 5,640 | +124.1 |
Source: HFR. The 2024 figures come from its fourth-quarter 2024 report. The 2026 row covers the nine months to September 30.
Assets fell 25% in 2008, the largest decline in the series, from 1,868 billion to 1,407 billion dollars. Investors withdrew a net 154.5 billion dollars, the HFRI Fund Weighted Composite lost 19.0%, and a record 1,471 funds were liquidated. Investors pulled another 131.2 billion dollars in 2009.
From 2016 to 2024, investors took out more than they put in during six years out of nine, a net 210.6 billion dollars over the period. Assets still grew from 2.90 trillion dollars at the end of 2015 to 4.51 trillion dollars at the end of 2024, so the whole increase came from investment returns.
The flows turned in 2025. Net inflows of 115.8 billion dollars that year and 124.1 billion dollars in the first nine months of 2026 add up to 239.9 billion dollars, more than the withdrawals of the nine previous years combined. Returns still drove most of the growth: of the record 642.8 billion dollar increase in assets in 2025, 527 billion dollars came from performance. The record year for inflows remains 2007, at 194.5 billion dollars.
Where new investor money went in 2025 and 2026
With Intelligence, using its own data, estimated 47 billion dollars of net inflows for 2025, the first full year of positive flows since 2022, with money coming in during 10 of the 12 months. HFR's estimate of 115.8 billion dollars is about 2.5 times larger.
In 2026, HFR's quarterly estimates were about 44 billion dollars in the first quarter, 45.2 billion dollars in the second and 34.5 billion dollars in the third. By size of firm, over the first three quarters:
- Firms managing more than 5 billion dollars received 113.7 billion dollars of net inflows.
- Firms managing between 1 billion and 5 billion dollars received 8.0 billion dollars, and had a small net outflow of 2.3 billion dollars in the third quarter.
- Firms managing less than 1 billion dollars received 2.4 billion dollars, about 2% of the total.
In the third quarter, relative value funds drew the most new money, 14.7 billion dollars, followed by macro funds at 8.8 billion dollars. Equity hedge funds took in 6.0 billion dollars and still shrank by 31.6 billion dollars, because losses in technology and healthcare funds outweighed the inflows.
Hedge fund assets by strategy
HFR splits the industry into four main strategy groups. Equity hedge covers long/short stock picking. Event-driven covers mergers, restructurings, activism and special situations. Relative value covers arbitrage between related securities, mostly in fixed income, and in HFR's classification also includes multi-strategy funds. Macro covers bets on interest rates, currencies and commodities, including the trend-following funds known as CTAs.
| Strategy | End of 2025 | September 30, 2026 | Share of total | Change in 2026 |
|---|---|---|---|---|
| Equity hedge | 1.57 trillion | 1.72 trillion | 30.5% | +9.6% |
| Event-driven | 1.45 trillion | 1.57 trillion | 27.8% | +8.3% |
| Relative value | 1.35 trillion | 1.45 trillion | 25.7% | +7.4% |
| Macro | 786.6 billion | 897.4 billion | 15.9% | +14.1% |
Amounts in dollars. End-of-2025 figures from HFR's year-end industry report, September 2026 figures from its third-quarter report. Shares are of the 5.64 trillion dollar total.
The two largest sub-strategies are equity fundamental value, which reached a record 933 billion dollars at the end of June 2026, and multi-strategy, which reached a record 900 billion dollars at the end of September. Multi-strategy assets include the large platforms run by Millennium, Citadel and Balyasny, described in our article on multi-manager hedge funds.
Macro grew fastest in 2026 as interest rates rose. The HFRI Macro index gained 4.3% in the third quarter, and systematic CTA funds were up 15.7% for the year through September, while equity hedge lost 2.1% in the quarter on swings in AI and technology stocks. Our article on managed futures explains how trend-following funds work.
The 2025 picture was the reverse. Equity hedge led with a 17.1% gain and healthcare-focused equity funds gained 33.9%. Among firms managing at least 1 billion dollars, quantitative funds grew their assets by an average of 30% in 2025, event-driven and credit funds by 21%, multi-strategy funds by 20% and equity funds by 19%.
Hedge fund assets by region and domicile
New York State is home to 171 firms with at least 1 billion dollars in hedge fund assets, managing more than 1.3 trillion dollars between them. London is second, with about 671 billion dollars across 92 firms, and London-based managers accounted for 71% of Europe's asset growth in 2025. Connecticut, home to Bridgewater and many Greenwich managers, had the fastest asset growth of any US state, at 25%.
Asian hedge funds, as HFR classifies them, held a record 152.1 billion dollars at the end of June 2026, and funds investing in emerging markets, wherever they are run from, held a record 287.6 billion dollars. Chris Hohn's TCI Fund Management overtook Man Group in 2025 as the largest hedge fund firm headquartered outside the US.
Where a fund is legally domiciled is a separate question from where its managers sit. Among the largest hedge funds filing Form PF, 53.6% of net assets sit in funds domiciled in the Cayman Islands and 36.7% in US funds, with Luxembourg at 2.9%, Ireland at 2.2% and the British Virgin Islands at 1.7%. A typical structure pairs a Delaware fund for US taxable investors with a Cayman fund for tax-exempt and foreign investors.
Concentration in the largest hedge fund firms
The 579 firms managing at least 1 billion dollars in hedge fund assets held 4.05 trillion dollars at the end of 2025, about 88% of With Intelligence's industry estimate. Their number rose by 46 during the year. Within that group, firms managing more than 10 billion dollars increased their share of assets from 54% in 2021 to 60%, while firms managing between 3 billion and 5 billion dollars fell from 12% to 9%.
The largest funds hold a bigger share of borrowing than of investor money. At the end of September 2025:
- The 10 largest hedge funds held 8.2% of all hedge fund net assets, 19.6% of gross assets and 35.8% of borrowings.
- The 100 largest held 27.7% of net assets, 49.9% of gross assets and 78.4% of borrowings.
- The 500 largest held 55.3% of net assets, 71.4% of gross assets and 93.9% of borrowings.
Borrowing sits mostly in relative value and macro funds. Among the largest funds, the gross assets of relative value funds averaged 8.8 times their net assets and those of macro funds 8.2 times, against 1.9 times for equity funds and 1.3 times for event-driven funds. Our list of hedge funds groups the best-known firms by strategy.
Hedge fund launches and liquidations
An estimated 561 hedge funds launched in 2025, the most since 2021, against 287 liquidations. Launches fell from 166 in the first quarter to 100 in the second, while liquidations reached 129 in the first quarter, the most in a quarter since mid-2024, then fell to 70. Equity hedge funds led both counts in the second quarter, with 40 launches and 31 closures, followed by macro, with 27 launches and 20 closures.
Launches peaked in 2005, when 2,073 funds opened, and liquidations peaked in 2008 at 1,471. From 2015 to 2022, more funds closed than opened in every year except 2021. Liquidations then fell to 406 in 2024 and 287 in 2025, the fewest in a year since 2003.
New funds charge slightly less to manage money and slightly more on profits. Funds launched in the second quarter of 2026 set an average management fee of 1.26% and an incentive fee of 17.5%, against 1.32% and 15.74% across the industry. Our article on hedge fund fees explains how each is calculated, and our guide to starting a hedge fund covers what a launch costs.
How much hedge funds make for investors
Hedge funds made an estimated 543 billion dollars for their investors in 2025, the largest dollar gain on record in the annual count by LCH Investments. HFR's estimate of performance-based asset growth for the same year was 527 billion dollars.
The 20 managers that made the most money for investors earned 115.8 billion dollars between them after fees, 21% of the industry total. TCI alone made 18.9 billion dollars, the largest one-year gain LCH has recorded for any manager, followed by Bridgewater at 15.6 billion dollars and D.E. Shaw at 12.7 billion dollars. Since launch, Citadel has made 90.4 billion dollars for its investors, D.E. Shaw 79.9 billion dollars and Bridgewater 79.1 billion dollars.
In the second quarter of 2026, the best tenth of the funds in the HFRI Fund Weighted Composite returned an average of 31.6% and the worst tenth lost 8.7%, a spread of 40.3 percentage points. In the third quarter, the asset-weighted version of the index gained 1.2% while the equal-weighted version lost 0.6%, meaning large funds did better than small ones.
Applied to 5.64 trillion dollars, the 1.32% average management fee would come to about 74 billion dollars a year before any incentive fee. That is an approximation: fee terms vary by fund, and many multi-manager platforms charge investors their actual costs in place of a fixed fee. Our comparison of a hedge fund and an index fund shows what those fees cost an investor over 20 years.
Hedge funds compared with private equity and other private funds
Among the private funds that file Form PF, hedge funds are the largest category by gross assets and the second largest by net assets. At the end of September 2025, they reported 13.9 trillion dollars of gross assets and 5.86 trillion dollars of net assets, against 7.96 trillion and 7.29 trillion dollars for private equity funds. Hedge funds made up 52% of all private fund gross assets and 35% of net assets.
Borrowing and derivatives account for the gap. Private equity funds mostly borrow at the level of the companies they buy, while hedge funds borrow inside the fund. Hedge funds also reported derivatives with an aggregate value of 22.8 trillion dollars, 98% of the total for all private funds. Our comparison of hedge funds and private equity covers how the two kinds of fund differ for investors.
Who invests in hedge funds
Form PF records who owns the largest hedge funds, the qualifying funds with at least 500 million dollars of net assets run by large advisers. At the end of September 2025, their 4.75 trillion dollars of net assets were held as follows:
- Other private funds, including funds of hedge funds and feeder funds: 20.4%, or 968 billion dollars.
- Non-profits, a category that includes university endowments and charitable foundations: 13.8%, or 657 billion dollars.
- US individuals: 11.7%, or 556 billion dollars.
- State and municipal pension plans: 11.3%, or 535 billion dollars.
- Other pension plans: 9.0%, or 429 billion dollars.
- Sovereign wealth funds and foreign official institutions: 7.8%, or 368 billion dollars.
- Insurance companies: 3.6%, or 173 billion dollars.
- Non-US individuals: 2.6%, or 123 billion dollars.
Pension plans together hold 20.3% of these funds, close to 1 trillion dollars, which is how hedge fund results reach people who have never invested in one directly. Individuals who invest directly must usually qualify as accredited investors or qualified purchasers. Our article on what a hedge fund is covers how the funds are structured and who may invest.
This article is general information, not investment advice.
Frequently asked questions
How big is the hedge fund industry?
Hedge funds managed an estimated 5.64 trillion dollars at the end of September 2026, according to HFR, the highest total on record. Other estimates differ with the method: With Intelligence put the industry at 4.6 trillion dollars at the end of 2025, while hedge funds filing Form PF with the SEC reported 5.86 trillion dollars of net assets and 13.9 trillion dollars of gross assets, which include borrowed money, at the end of September 2025.
How many hedge funds are there?
SEC-registered advisers reported 9,940 hedge funds on Form PF at the end of September 2025. That count only covers advisers with at least 150 million dollars in private fund assets, so funds run by smaller or unregistered advisers are missing from it. At the other end of the scale, 579 firms managed at least 1 billion dollars in hedge fund assets at the end of 2025.
What is the largest hedge fund firm?
It depends on the measure. By hedge fund assets, AQR Capital Management topped With Intelligence's ranking of billion-dollar managers at the end of 2025 after adding more than 50 billion dollars during the year, displacing Bridgewater for the first time since the ranking began in 2009. By money made for investors since launch, Citadel leads LCH Investments' ranking with 90.4 billion dollars of net gains since 1990.
How are hedge funds performing in 2026?
The HFRI Fund Weighted Composite gained 7.5% in the first half of 2026, its best first half since 2021, then lost 0.6% in the third quarter as interest rates rose sharply and technology stocks swung. Macro funds gained 4.3% in the third quarter and trend-following CTA funds were up 15.7% for the year through September.
How much money do hedge funds make?
Hedge funds made an estimated 543 billion dollars for their investors in 2025, the largest dollar gain on record according to LCH Investments. The 20 most profitable managers accounted for 115.8 billion dollars of it. Managers themselves earn a management fee, which averaged 1.32% of assets in the second quarter of 2026, and an incentive fee, which averaged 15.74% of profits.
Is the hedge fund industry growing?
Yes, in assets and in new money. Industry capital rose from 4.51 trillion dollars at the end of 2024 to 5.64 trillion dollars at the end of September 2026. Investors added a net 239.9 billion dollars over 2025 and the first nine months of 2026, after withdrawing a net 210.6 billion dollars from 2016 to 2024. The number of new funds has slowed: launches fell from 166 in the first quarter of 2026 to 100 in the second.