2025 Hedge Fund Performance: Bridgewater & D.E. Shaw Lead Gains

NEW YORK, January 2, 2026

Hedge Funds Rack Up Record Gains Amidst Trade War Volatility

Top firms like Bridgewater and D.E. Shaw saw substantial returns in 2025, capitalizing on market uncertainty.

• Hedge funds posted their best returns in at least five years.
• Bridgewater Associates’ Pure Alpha II fund surged 34%, a record high.
• D.E. Shaw & Co. strategies soared as much as 28.2%.
• The gains were largely fueled by volatility in global markets stemming from trade tensions.

Hedge funds enjoyed a banner year in 2025, with initial estimates pointing to the strongest industry returns in at least half a decade. Surging U.S. stocks, precious metals, and the unpredictable swings in bond and currency markets—all spurred by President Donald Trump’s trade policies—created a lucrative environment for skilled traders. What were the overall returns for hedge funds in 2025? Industry returns are on track to be the best in at least five years.

Bridgewater’s Rebound and Ray Dalio’s Exit

Bridgewater Associates, the 50-year-old investment giant, led the charge with impressive double-digit returns across its various strategies. The firm’s flagship Pure Alpha II macro fund delivered a remarkable 34% gain, its best performance ever. The All Weather strategy also performed well, rising 20%. This success comes as Bridgewater undergoes a significant transformation under sole CEO Nir Bar Dea, who has implemented personnel changes and asset cuts aimed at boosting performance.

Notably, billionaire founder Ray Dalio has completely exited the firm, selling his remaining stake and stepping down from the board last year. Bridgewater’s Pure Alpha II fund’s 2025 gains mark a significant turnaround from annualized returns of less than 3% between 2012 and 2024. The firm’s AIA Labs fund, which leverages machine learning in its investment decisions, also contributed to the positive results, gaining 11% and managing over $5 billion in assets.

D.E. Shaw and Other Top Performers

D.E. Shaw & Co. also experienced substantial gains, with its strategies soaring as much as 28.2%. The firm’s flagship multistrategy Composite hedge fund gained 18.5%, while Oculus achieved an estimated 28.2% return. Michel Massoud’s event-driven Melqart Opportunities Fund saw even more dramatic growth, surging 45%.

Millennium Management, with $83.5 billion under management, posted a 10.5% gain. ExodusPoint, which has been expanding its equities group, achieved an 18% increase—its best performance since its founding in 2017, managing approximately $12 billion. Citadel’s flagship hedge fund increased by 10.2%, marking the first year Millennium outperformed Citadel’s Wellington fund since 2020.

Quantitative Strategies Shine

In the realm of quantitative investing, AQR Capital Management’s multistrategy offering returned 19.6% in 2025. Here’s a look at how other hedge funds fared last year, based on initial estimates:

Hedge Fund	Strategy	2025 Return
Melqart Opportunities	Event-Driven	45.1%
Bridgewater Asia	Macro	37
Discovery	Macro	35.6
Bridgewater Pure Alpha II	Macro	34
Bridgewater China	Macro	34
DE Shaw Oculus	Multistrategy	28.2
Soroban Opportunities	Equity Long/Short	25
AQR Adaptive	Quant Equity Market Neutral	24.4
Anson Investments Master	Equity	21.2
Bridgewater All Weather	Risk Parity	20
AQR Apex	Quant Multistrategy	19.6
Citadel Tactical Trading	Multistrategy	18.6
DE Shaw Composite	Multistrategy	18.5
Dymon	Multistrategy	18.1
ExodusPoint	Multistrategy	18.04
Kite Lake Special Opportunities	Event-Driven	17.9
AQR Delphi	Quant Equity Long/Short	16.8
Balyasny	Multistrategy	16.7
Schonfeld Fundamental Equity	Multimanager equity	16.5
Walleye	Multistrategy	15.5
Citadel Equities	Equities	14.5
LMR Partners	Multistrategy	13.5
Schonfeld Strategic Partners	Multistrategy	12.5
Marshall Wace	Eureka*/Equity Long/Short	11.6
Pinpoint Multi-Strategy	Multistrategy	11.6
Bridgewater AIA	Quant Macro	11
Taula	Macro	11
Millennium	Multistrategy	10.5
Citadel Wellington	Multistrategy	10.2
FIFTHDELTA	Equity	10.3
New Holland Tactical Alpha	Multistrategy	9.8
Citadel Global Fixed Income	Fixed Income	9.4
Winton	Quant multistrategy	7.4
Source: Bloomberg reporting
*as of Dec. 30

Representatives for Bridgewater, which managed $92 billion as of September, and for the other hedge funds mentioned, declined to comment.