Hedge fund AUM came in just shy of the $6 trillion mark through Q1 2026, marking another all-time high for the industry. Net flows into hedge funds measured $19.8 billion in Q1 2026, but only $2.4 billion over the last 12 months. Asset-weighted returns for the industry overall were positive during the quarter at 0.7%, led by managed futures, volatility trading, and macro strategies.
Key Findings
As outlined in our prior report, the case for increased hedge fund allocations, namely heightened cross-asset volatility, a slowdown in private asset realizations, and stretched equity and credit valuations, contributed to the largest quarterly net inflow figure ($19.8 billion) since Q3 2023. Investor allocations during the quarter were greatest for market neutral equity and managed futures funds, while redemptions were largely concentrated in multi-strategy, event driven, and equity long/short funds.
The distribution of ticket sizes reveals a preference from public pensions for larger HFs. Ticket sizes for hedge fund mandates were also noticeably larger than commitments made to private markets funds. Trend-following, multi-strategy, and relative value strategies – all of which traditionally sit in the “diversifier” category – were the most frequent public plan mandate winners. Discretionary macro and pure equity long/short funds were largely absent from the list.
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