Preqin has published its Hedge Funds Q4 2024: Preqin Quarterly Update report which reveals that Preqin’s All Hedge Fund index gained 2.4 per cent in Q4 2024, as the index gained 12.6 per cent over the year 2024 according to most recent performance data.
In gaining 2.4 per cent in Q4 2024, hedge funds globally outperformed public equities and debt, as the MSCI World index saw -0.1 per cent performance and the Bloomberg Global Aggregate -5.1 per cent in the quarter.
Following a flat October at -0.1 per cent, in November, most markets responded positively to the outcome of the US election and hedge funds’ global performance rose 3.7 per cent. However, in December, an increase in US inflation numbers and employment growth created concern around delayed interest rate cuts by the Federal Reserve. In turn, hedge funds’ performance was -1.2 per cent in December.
As Charles McGrath, lead author of the report notes, overall market volatility has been a key theme in 2024. Strategies with lower sensitivity, or betas, to public markets, have outperformed those with higher betas in 2024. Please see key findings by strategy below.
Key report facts:
Returns by top-level strategy: Multi-strategy and relative value were the best performing top-level strategies in Q4 2024, at 3.26 per cent and 1.80 per cent, respectively. Meanwhile, equity strategies saw the smallest gain, at 0.09 per cent in the quarter.
Niche strategies driven by cryptocurrency sub-strategy returns: The cryptocurrency sub-hedge fund strategy was up 38.3 per cent in Q4 2024, when it rose nearly 45 per cent in November specifically – largely driven by the rise in Bitcoin’s spot price.
Hedge fund investors emphasise risk mitigation in 2025: Hedge fund strategies targeted in 2025, as per Preqin Pro data, show that global macro and relative value strategies saw the largest increase in interest during the fourth quarter. Q4 compared to Q3 2024, global macro rose to 46 per cent from 36 per cent, and relative value rose to 40 per cent from 28 per cent, respectively.
Charles McGrath, Associate Vice President, Research Insights at Preqin, says: “The final quarter of 2024 was a microcosm of the year 2024, defined by a market steered by various political and economic developments both positive and negative. With current preliminary performance numbers for 2024 at 12.6 per cent overall, the year is the fourth in the past five for hedge funds to record a positive double-digit return.”
