(HedgeCo.Net) After nearly a decade where closures outpaced launches, 2025 is marking a dramatic reversal for the hedge fund industry — with a surge in new fund launches, increased inflows, and fresh optimism among allocators and managers alike. confluencegp.com+2Withintelligence+2
Data through mid-2025 show that 262 new hedge funds launched, while only 138 were liquidated — a net positive of 124 funds. This is the strongest first-half launch momentum in several years. confluencegp.com Industry-wide assets under management (AUM) have swelled to nearly US$5 trillion, a historic high. confluencegp.com+2Expert Network Calls+2
Several factors are driving this resurgence:
- Performance & returns: Hedge funds’ improved track record in 2024 and 2025 has restored confidence. Repool+1
- Investor demand for alternative strategies: As traditional asset classes (stocks, bonds) become more volatile or yield low returns, institutional investors increasingly look to hedge funds for uncorrelated returns and diversification. Withintelligence+1
- Better infrastructure & lower barriers for new funds: Advances in administration, compliance, and technology make it easier for smaller managers to launch, operate efficiently, and attract capital — even without the scale of giant funds. confluencegp.com+1
Analysts note, however, that not every new fund will succeed: investors are applying greater due diligence, favoring managers with solid track records, rigorous operations, and differentiated strategies. confluencegp.com+1
Implication: The industry’s growth isn’t just quantitative (more funds) — it’s qualitative. Investors seem willing to back new ideas, nimble managers, and alternative strategies after a long drought of innovation.