Introduction
Several trends are becoming more pronounced across the hedge fund market in 2026. Launch activity remains concentrated in North America and equity strategies, while consolidation continues among multi-strategy managers and the largest platforms expand their use of external capital.
Allocator demand is also becoming more concentrated: multi-strategy represented 21.6% of H1 2026 investor intentions, while interest in capacity-constrained global macro funds reached a record high.
Asset flows continue to improve, with six consecutive quarters of net inflows reversing part of the heavy redemptions seen between 2022 and 2024. Strong performance has reinforced this trend, with asset-weighted returns delivering their strongest first half since 2009.
Large US public pensions are also moving closer to hedge fund targets, suggesting further room for institutional allocation growth.
Launches: North America dominates first-half launch activity
North America’s first-half pipeline of funds in development was its second-largest since pre-Covid, with 141 funds uncovered by our data.
Despite a strong Q1, Europe was relatively muted overall, as second quarter debuts suffered following conflict in the Middle East and the ensuing market disruption. This period of uncertainty also led to a number of high-profile closures, including Aaron Weiner’s $3 billion Atlantic Wolf, CPP-backed multi-analyst platform Taproot, 27-year $8 billion equity stalwart Eminence and AllianceBernstein’s multi-manager solution AB Arya.
Macro’s popularity continues, accounting for more than 10% of funds in development across each of the last three half-years. Notable recent additions include Istari Capital, being readied by Thiel Macro veteran Jason Lupatkin and TPG executive Bill Todebush, with around $1 billion in backing from Peter Thiel.
Performance: CTAs regain edge over macro manager
Despite difficult months for many strategies in March and June, hedge funds delivered their best six months since 2009 on an asset-weighted basis. Firms rebounded from Middle East market disruption and a number of equity managers rode an AI-fueled wave to post notable gains.
Previous AI rallies have been centered on US stocks, but Asian equity managers enjoyed a banner H1, with several seeing triple digit returns, as the region benefited from its role as the key provider of physical AI infrastructure. Equity l/s strategies led the pack YTD, while relative value and CTAs posted notable rises.
For the first time since 2022, CTAs have outpaced discretionary global macro managers, as strong commodity trends and higher macro volatility boosted returns. Discretionary macro managers have suffered a more patchy period, with central bank policy and ongoing geopolitical events weighing heavily on performance.
Multi-strats and Externals: Multi-manager consolidation continues
As predicted in the 2026 Hedge Fund Outlook, consolidation in the multi-strat space has accelerated, with Jain’s decision to hand back external assets and take on Millennium Management capital exclusively, and the closure of AllianceBernstein’s AB Arya multi-strategy fund. This comes in addition to the closure of Eisler Capital in the latter part of 2025, highlighting the difficulties in scaling such a business and in commanding the fees necessary to attract talent and deploy capital effectively on top of managing risk in continued market volatility.
Alongside the addition of the multi-billion-dollar Jain deal, Millennium’s continued buildout of the external allocation program continues apace. In terms of both notional assets allocated and number of live tickets, Izzy Englander’s $87 billion hedge fund was the most active, according to our latest external allocations report. The largest multi-strategy hedge funds have increased the number of external tickets overall, with capital allocated to at least 129 external managers, according to our reporting and analysis of SEC filings.
In addition to a $10 billion partnership with WorldQuant, Millennium now has several allocations of $5 billion or more, with Taula and now Jain considerable in size and institutional-sized businesses. Sources indicate Millennium has begun placing capital calls on recent billions raised to fund the Jain deal, whilst it has also added further business development staffers from prime brokers and rival hedge funds to continue its search for further external managers.
Macros: Macro remains in favor despite stumbles
Several notable macro funds, including Taula, JJJ, and Tudor, all suffered double-digit losses in March on the back of the Middle East war causing widespread unsettling of markets, yet this has not dented investor enthusiasm for the strategy as inflows and searches persist and capacity remains at a premium. Commodities, FX and AI-driven equity positions have provided macro managers with significant opportunities despite the rout at the end of Q1.
Along with multi-strategy and equity strategies, investors have maintained their interest in investing in global macro funds in the recent year, a trend that continued through the first half of 2026. Funds are in huge demand, a view indicated by the number of managers that have limited inflows.
As Greg Coffey’s Kirkoswald joined the likes of Rokos, Deem and Forada in limiting flows into their products, new launches and other single-CIO funds with remaining capacity are in a good place to take advantage of the capacity constraints elsewhere. Alongside the larger managers who are well positioned to take on new assets, some sub-$1 billion managers have performed well, including PinnBrook and Kate Capital, as well as newer funds such as Nick Bhuta’s Agora and Calibrate’s Eric Lonergan. These smaller funds may be in a strong position to attract flows.
Flows: Hedge fund inflows continue into 2026
Hedge funds recorded a sixth consecutive quarter of net capital inflows in Q2 2026, attracting an estimated $6.6 billion despite redemption pressure across a number of strategies during June.
CTAs and fixed income/credit funds attracted the largest estimated net inflows during the second quarter, with CTAs recording positive flows in each of the quarter’s three months.
The hedge fund industry attracted an estimated $13 billion of net flows during H1 2026, putting it on track for a second consecutive year of positive capital raising. The turnaround follows three consecutive years of net outflows between 2022 and 2024.
Hedge funds have attracted $59.3 billion across six consecutive quarters of net inflows since the start of 2025.
Allocations
Public Pensions: Public pensions close hedge fund gaps
2026 has seen some of the largest US investors make significant progress towards closing gaps to their hedge fund targets. Most notable is CalSTRS, which has narrowed the gap to its risk-mitigation portfolio target by more than $4 billion.
Virginia Retirement System has also been active, deploying $1.3 billion across three hedge fund mandates, including some of the largest ticket sizes tracked by us so far in 2026.
Both of Ohio’s largest public pensions still have work to do despite moving closer to target, with the teachers’ plan budgeting up to $2.6 billion for new allocations in the next fiscal year.
CalSTRS has narrowed its hedge fund underweight by more than $4 billion in 2026.
Strategy Intentions: Multi-strategy leads allocator demand
Allocator interest in multi-strategy hedge funds has increased notably over the past year and is filtering through into sizeable mandates. Virginia Retirement System allocated $500 million to a multi-strategy fund with PIMCO earlier this year, while North Carolina awarded $500 million to Balyasny.
Interest in CTA and macro strategies also edged higher in H1 2026, with the former coming back strongly this year after a difficult run.
Meanwhile, investor interest in digital asset-related hedge funds has declined following a sharp uptick in 2025. Similarly, there is less interest in fixed income/credit strategies in 2026 than last year.
More than one in five hedge fund allocation intentions targeted multi-strategy managers in H1 2026.
Methodology
This report draws on proprietary data from With Intelligence by S&P Global, covering hedge fund launches, performance, investor intentions, net flows, external allocations and institutional mandates. Figures are based on data available through H1 2026, with market activity and allocation trends analyzed across comparable historical periods.
With Intelligence is part of S&P Global, delivering end-to-end coverage across the alternatives marketplace. With Intelligence’s proprietary data spans a uniquely comprehensive view of private market activity and relationships, including robust, direct-from-investor allocation data and benchmarking capabilities. We are here to help you leverage comprehensive, connected and actionable private markets intelligence.
