Hedge funds delivered their highest annual return since the start of the decade in 2024, achieving a weighted average return of 15.7%, the highest since 2020’s 18.3% weighted average return, new data from Citco reveals.
Equities remained the top-performing strategy group, delivering a weighted average return of 20.2%, narrowly surpassing Global Macro funds at 19.5%. Multi-Strategy funds also recorded double-digit gains, ending the year with a 13.3% return.
Event Driven funds followed with an 8.4% return, while Fixed Income Arbitrage strategies posted 7.3%. The only negative performer in 2024 was Commodity strategies, which saw a weighted average return of -1.3%, marking the second consecutive year of losses.
Citco, which administers $1.3tn in hedge fund investments and over $1tn in private markets assets for its clients, also reported modest net outflows of $10.6bn across hedge funds in 2024. These were primarily concentrated in Equity and Multi-Strategy funds, with the bulk of redemptions occurring in the final quarter. However, overall net outflows were approximately 75% lower than the previous year.
Meanwhile, trade volumes hit record highs throughout 2024, with every month seeing a significant uptick in daily activity compared to the same period in 2023. Trading volumes surged mid-summer, driven in part by high-frequency trading strategies, and remained elevated for the remainder of the year.
Treasury payment volumes among hedge fund clients also soared in 2024, experiencing the fastest growth rates since 2021. Several record highs were broken, including a new peak in July amid expectations of an imminent policy rate cut. That record was subsequently surpassed in October and again in December, when monthly treasury payments approached 60,000 – the highest level since Citco began tracking these figures.
