Hedge Funds Q3 2025: Preqin Quarterly Update

Pockets of outperformance compared with public market indices, positive investor sentiment, and net cash flows into hedge funds mark a strong Q3 for the asset class

• Hedge funds carry the momentum generated in Q2, posting strong returns as markets continue to rally

• More opportunities arise in the recovering M&A market, with event-driven funds taking full advantage of potential for arbitrage

• Average allocations toward hedge funds vary considerably depending on type of institutional investor