The world’s leading hedge funds, including D.E. Shaw, Bridgewater Associates, Balyasny Asset Management, and Point72 Asset Management, posted strong double-digit gains in 2025, fueled by a volatile stock market and surging interest in AI-driven investments, according to sources familiar with the matter.

D.E. Shaw’s Stellar Performance

D.E. Shaw’s flagship funds performed exceptionally well in 2025:

• Oculus Fund: Net return of 28.2%, with an annualized return of 14.4% since its founding in 2004.
• Composite Fund: Net return of 18.5%, with a 12.9% annualized net return since inception in 2001.

Founded in 1988, D.E. Shaw manages over $85 billion across hedge funds, private markets, multi-asset, and active equity strategies, cementing its position as a top multi-strategy hedge fund manager.

Balyasny, Point72, and Other Multi-Manager Funds

Other notable multi-manager funds also posted impressive results:

• Balyasny Asset Management: Gains of 16.7% in 2025.
• Point72 Asset Management (Steve Cohen): Return of 17.5%.
• AQR Capital Management (Cliff Asness): Apex Strategy returned 19.6%, while the Helix Strategy delivered 18.6%.

Bridgewater’s Record Year

Bridgewater Associates, founded by billionaire Ray Dalio and currently led by CEO Nir Bar Dea, reported its highest profits in 50 years. Its flagship Pure Alpha Fund surged 34% in 2025, leading the pack of multi-strategy “pod shop” funds that manage diverse assets, including stocks, bonds, commodities, and currencies.

Market Drivers Behind Hedge Fund Success

The strong performance of hedge funds in 2025 was driven by:

1. AI-driven stock market rally: Technology and AI-focused companies fueled equity market gains.
2. Market volatility: Policies and trade actions by the Trump administration created opportunities in bonds, currencies, and equities.
3. Active trading strategies: Hedge fund pods and multi-asset teams capitalized on price arbitrage and rapid portfolio adjustments.

The S&P 500 rose approximately 16% in 2025, despite wide swings between record highs, near bear-market lows, and new year-end highs, creating a dynamic environment for active managers.

Mixed Results for Some Firms

Not all top funds outperformed the market. Millennium gained 10.5%, while Citadel’s Wellington Fund returned 10.2%, somewhat lagging peers due to exposure to volatile sectors during the first half of the year. Despite this, Citadel’s long-term annualized net return since 1990 remains around 19%, reflecting consistent performance over decades.

“Overall, it has been a strong year for hedge funds across strategies, with decent alpha generation and recognition from allocators,” said Vanessa Bogaardt, global head of capital introduction at Bank of America.
“Hedge fund assets are at all-time highs, supported by net inflows, and allocator sentiment toward hedge funds remains positive. We see plenty of opportunities to explore in 2026.”