The global hedge fund industry has reached an all-time high of $4.98 trillion in assets under management (AUM), marking the eighth consecutive quarter of growth, according to a new report from Hedge Fund Research (HFR).
The surge was fueled by nearly $34 billion in fresh inflows during Q3 — the largest quarterly inflow since 2007. The total number of hedge funds has also risen to 8,464, the highest level in a decade.
HFR President Kenneth J. Heinz noted that the expansion was driven by “powerful trends” such as M&A activity, cryptocurrency exposure, and strong institutional demand from pension funds, sovereign wealth funds, and family offices.
U.S. banking giants like JPMorgan, Goldman Sachs, and Bank of America also reported strong profits from their prime brokerage businesses, highlighting the growing leverage and trading activity across the sector.
Year-to-date, investors have added $71 billion in new capital, the strongest inflow period since 2014. Equity hedge funds led the way with $18 billion in new allocations, followed by relative value funds focused on pricing inefficiencies.
The hedge fund industry’s rapid growth signals renewed investor confidence, reflecting both robust market performance and the increasing role of alternative strategies in diversified global portfolios.