Hedge Fund Assets Edge to Record $5.64T as Macro Funds Shine

Investors kept pouring money into hedge funds in the third quarter even as a spike in interest rates and a tech and AI stock selloff dented returns, pushing industry assets to a record $5.64 trillion, according to HFR. But the pace of growth slowed sharply from a record-setting first half, and the gains were increasingly concentrated among the largest managers and macro strategies.

Investors added an estimated net $34.5 billion in the quarter, down from $45.2 billion in the second quarter, more than offsetting $27.4 billion in performance losses. It was the 16th straight quarterly increase. Assets have grown $480 billion this year, including $124.1 billion in net inflows, after a record $409.3 billion jump in the second quarter.

Losses were concentrated in technology and special situations strategies as rates and volatility surged and managers navigated uncertainty tied to the Iran military conflict. Treasury yields posted their sharpest quarterly rise since 1994 over the period.

Macro strategies led. The HFRI Macro (Total) Index gained 4.3%, driven by trend-following CTAs, which rose 5.7% for the quarter and 15.7% year to date. Macro assets climbed $40 billion to $897.4 billion.

Funds of hedge funds lost 1.4%, trimming their 2026 gain to 7%, and their assets slipped to $876 billion from a record $889 billion.

Firms managing more than $5 billion took in a net $36.6 billion, while midsize firms lost $2.3 billion and the smallest gained $190 million. Larger funds also performed better: HFR’s asset-weighted composite rose 1.2%, while its equal-weighted index fell 0.6%.

HFR President Kenneth Heinz said managers are positioning for a wide range of outcomes from the U.S. midterm elections, including potential volatility and market dislocations.