Bridgewater, D.E. Shaw Among Top Hedge Fund Gainers Of 2025
Major hedge funds delivered outstanding performance in 2025, with Bridgewater Associates leading at 34% returns for its Pure Alpha II fund, marking the best performance in the firm's 50-year history. D.E. Shaw, Melqart, and other prominent funds also posted strong double-digit gains, benefiting from tariff-driven market volatility and favorable trading conditions throughout the year.
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Major hedge funds delivered exceptional performance in 2025, with leading multi-manager funds posting strong double-digit returns during a year characterized by tariff-fueled market uncertainty and heightened volatility. The impressive gains reflect a robust period for the hedge fund industry, with initial estimates showing overall hedge fund returns on track to be the best in at least five years.
Bridgewater Associates Leads with Record Performance
Bridgewater Associates achieved remarkable results with its flagship Pure Alpha II fund surging 34.00% in 2025, representing the best performance in the firm's 50-year history. The Westport, Connecticut-based firm posted double-digit returns across strategies during this exceptional year.
| Fund Strategy: | 2025 Performance |
|---|---|
| Pure Alpha II Fund: | 34.00% |
| All Weather Strategy: | 20.00% |
| AIA Labs Fund: | 11.00% |
The Pure Alpha II fund's gains represent a significant rebound from annualized returns of less than 3.00% between 2012 and 2024. The firm's AIA Labs fund, which uses machine learning as the primary basis of decision-making, has raised more than $5 billion. Bridgewater, which managed $92 billion as of September, has been in reboot mode since Nir Bar Dea became sole chief executive officer in 2023, implementing sweeping personnel changes. Billionaire founder Ray Dalio completely exited the firm, selling his remaining stake and stepping down from the board.
D.E. Shaw Delivers Strong Multi-Strategy Returns
D.E. Shaw demonstrated solid performance across its investment strategies, with flagship funds posting impressive gains throughout the year.
| Fund: | 2025 Net Return | Annualized Return Since Inception | Inception Year |
|---|---|---|---|
| Oculus Fund: | 28.20% | 14.40% | 2004 |
| Composite Fund: | 18.50% | 12.90% | 2001 |
Founded in 1988, D.E. Shaw managed more than $85 billion as of December across hedge funds, private markets, multi-asset-class and active equity investment strategies.
Notable Outperformers and Mixed Results
Several other prominent hedge funds achieved strong returns, while some experienced more modest gains during the volatile trading environment.
| Fund: | 2025 Performance | Additional Details |
|---|---|---|
| Melqart Opportunities Fund: | 45.00% | Event-driven strategy, ~$1.4B AUM |
| AQR Multistrategy: | 19.60% | Quantitative investing approach |
| ExodusPoint: | 18.00% | Best performance since 2017 founding |
| Balyasny Asset Management: | 16.70% | Multi-strategy approach |
| Point72 Asset Management: | 16.50% | Steve Cohen's firm |
| Millennium Management: | 10.50% | $83.5B AUM, outperformed Citadel |
| Citadel Wellington Fund: | 10.20% | First time lagging Millennium since 2020 |
Michel Massoud's event-driven Melqart Opportunities Fund led with exceptional 45.00% gains. ExodusPoint, which manages about $12 billion and has been building out its equities group to complement fixed-income operations, posted its strongest performance since founding.
Market Dynamics Drive Success
The exceptional hedge fund performance was supported by favorable market dynamics throughout 2025. Surging US stocks, precious metals, and volatility in bond and currency markets spurred by President Donald Trump's trade policies created profitable opportunities for trading desks across Wall Street. The benchmark S&P 500 index rose approximately 16.00% during the year, experiencing significant volatility as markets moved from record highs to near bear-market lows before reaching fresh records.
This tariff-fueled market uncertainty presented a fertile hunting ground for traders, with active portfolio management and price arbitrage opportunities emerging from policy-driven market fluctuations. The volatility, largely driven by changes affecting trade, fiscal, and geopolitical landscapes, benefited various hedge fund strategies across the industry.
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