Five key takeaways from Miami Hedge Fund Week
Miami's annual Hedge Fund Week has become the single largest global gathering of the industry every year. It's where allocators, managers, service providers and journalists from around the world meet to discuss the latest about the industry and international markets. Five key takeaways below.
1) Hedge funds are back
Hedge funds delivered their strongest annual performance in 2025 since 2009, according to the industry data provider Hedge Fund Research. Their main fund-weighted index was up 12.5%, but that is an aggregate number for the industry as a whole and of course many funds did much better than that. Net asset inflows were the highest since 2007, at a total of $115 billion.
All of this tells us that not only is hedge fund performance back, so is investor confidence in the industry, and this was very evident in Miami. Despite the best efforts of a blizzard in the northeast of the US to thwart attendees, managers and allocators packed the hotels of South Beach.
2) Allocators increasingly want liquid not illiquid funds
Investor concerns about private equity distributions have been well-publicised. The case for locking up your money, as an investor, was that you would ultimately get more of it back. But with capital being returned at a slower rate that is a harder argument to make.
Now private credit is also under the spotlight after concerns about opacity and valuations led to a wave of investor redemptions.
The result is that many allocators are increasingly looking at liquid rather than illiquid funds, with hedge funds leading the way.
3) In a volatile world, macro is attractive
The event took place just before the conflagration in the Middle East commenced, but everyone was talking about geopolitical uncertainty and increased risk.
The world is a more dangerous and unpredictable place than it used to be, and that means that strategies that profit from increased volatility and uncertainty are performing strongly.
Macro is the most obvious of these, but the trend benefits active management over passive in general.
4) Investors worried about the US are turning to European and Asian funds
The “tariff tantrum” last spring not only spooked markets, it prompted allocators who were nervous about political risk to consider increased diversification away from US assets.
This is not a question of wholesale divestment from US assets because the US still has the largest and deepest capital markets in the world.
But it seems clear that allocators did start to look more at Europe and Asia and there is some evidence that capital is flowing to hedge funds there as a result.
5) Emerging markets hedge funds are generating significant allocator interest
The case for investing in emerging markets (EMs) in general was always that it was there where most of global growth was happening. The case against it was that it was typically a roller-coaster ride for investors with down years following up years.
But many EM hedge funds offer investors the ability to access the space with more consistent returns. They can use instruments favoured by hedge funds such as leverage, derivatives and shorts. They will often trade individual situations or names rather than being passively long EM assets.
With many allocators having concerns about some developed markets, emerging markets are now in vogue. And because they offer allocators the opportunity to access the upside of emerging markets while managing the downside, EM hedge funds are generating significant investor interest.
What all this means in practice for hedge fund managers is that the industry has a great story to tell to investors, there is now greater appetite from investors to allocate, and individual firms are increasingly aware of the importance of informing and educating sophisticated investor audiences about what they do.
In particular, hedge fund firms in Europe and Asia now have a great opportunity to benefit from increased investor interest from the US; and firms operating globally with strategies such as emerging markets which offer diversification from US assets are also now highly attractive to allocators internationally.
Thoughtful, careful coverage in the top global news outlets which investors consider most credible can act as leverage on top of existing marketing, putting firms on the radar of investors, generating reverse enquiries and resulting in dialogue which can ultimately lead to allocations.
Christen Thomson is Senior Counsel at CDR and founded its global hedge fund PR practice.
