Hedge Funds Thrive in 2025 - video Dailymotion

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00:00What was the thing that fueled this industry for such a good year?

00:03So there were many things all coming together.

00:05You're looking at just a really volatile market, the good kind of volatility,

00:09where there's a lot of unpredictability in this space.

00:13You don't know what's happening around AI technology.

00:15You have geopolitical tensions.

00:17You have wars in the Middle East.

00:18You have interest rate uncertainty.

00:22So all of these things create these ebbs and flows in the market

00:24that provide trading opportunity for funds to wager around.

00:28And so, as you've seen, a lot of funds made a lot of money.

00:32We have pretty much steady gains across all strategies, across all sizes.

00:38And so it's been one of the best years to be a hedge fund trader.

00:41Is it, you know, I was reading about the returns earlier,

00:44and there was a lot of excitement around double-digit returns.

00:49But the S&P also made double-digit returns.

00:52The benchmark index was up 17%.

00:54Is it necessarily then easier for these women and men hedge funds to make good returns

01:01when the overall market is up as well, or does that not correlate?

01:04So sometimes the lifting tide raises all boats.

01:07But when you look at hedge funds, they really should be, A, making alpha,

01:11which is beating the markets in some ways, depending on the strategy.

01:15But really, it's creating additional...

01:15And that's important, by the way, Hema, because they're not all benchmarked to the S&P, right?

01:20They're not all, exactly.

01:21So you really need to...

01:21You may have a strategy that was only up 5%, or you may have a strategy that was down.

01:25Exactly.

01:25So it really depends on the strategy.

01:27And does the strategy benchmark themselves against which indices?

01:32So when you look at that, that's important.

01:33You also want to look at how people use hedge funds.

01:37And they use them oftentimes to hedge against a down market,

01:41to hedge against when things are not doing well,

01:43to diversify your portfolio so you don't have just long stock exposure.

01:48So, again, that's why strategies matter.

01:50Are you in a long tech hedge fund where you do sort of look at the S&P maybe a little bit more closely,

01:56and where maybe the tech AI positions track it more?

01:58Or are you looking at some sort of more nuanced credit hedge fund that's doing things that are different,

02:05where if there is a down market, the fund should protect against that

02:08and make you money so that your portfolio is a little bit safer?

02:11Does it help them that when you look at other things one might compare hedge funds to,

02:16in the alts bucket, that private equity hasn't done as well,

02:19that they've been struggling to exit, that they're not giving money back?

02:22Does that also give this industry a lift?

02:24It does, because in some ways you are seeing flows move back into hedge funds

02:30with concerns over private equity.

02:33But on the other hand, the biggest allocators are still stuck in private equity.

02:38And so what that means is they don't have as many dollars to put to work in hedge funds

02:43as they did before when they would get these distributions from private equity

02:47that they could then reinvest into different things.

02:50So in some ways it's harder,

02:51because if you are a fund manager out there raising money,

02:55you're looking to retail investors,

02:57maybe you're looking to Middle East sovereigns to raise additional cash

03:01rather than the traditional pensions and downwinds foundations,

03:04where it's a lot harder than it would have been otherwise.

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