Sustained Hedge Fund Profits Evident in Q2 as per Citco Data
Citco-Administered Hedge Funds Achieve Strong Q2 Performance
In Q2 2025, Citco-administered hedge funds delivered a robust performance, marking their 11th consecutive quarter of positive returns. The overall weighted average return for these funds was 8.3%, reflecting a market rebound from the tariff-linked uncertainty experienced in Q1. Year-to-date, these funds posted an 11% weighted average return.
Key trends and performance metrics included:
- Top-performing strategies: Multi-strategy funds led with a 9.8% weighted average return, followed closely by equity-focused funds at 9.2%. Other strategies were positive except for the commodities sector, which declined by -3.2% in Q2, resulting in a -2.2% YTD return for commodities.
- Impact of fund size: Hedge funds with more than $3 billion assets under administration (AUA) achieved the highest returns, posting a weighted average of 10.4% for Q2 and 14.5% YTD.
- Capital flows: Net inflows remained robust with $10.7 billion entering hedge funds in Q2, where subscriptions ($56.6 billion) exceeded redemptions ($45.9 billion). Cumulatively in 2025, net inflows reached $17.8 billion.
Multi-strategy funds had net inflows of $12.1bn in Q2, an increase from $3.5bn in the previous quarter. Trading activity has accelerated since January, with equities, equity index, and rates derivatives strategies dominating. Outsourced treasury operations achieved a record, with Citco's middle office solutions team processing over 170,000 payments.
Declan Quilligan, head of Hedge Fund Services, commented that hedge funds have delivered a standout quarter of performance. He noted that most hedge funds administered by Citco delivered positive returns in Q2, with all other strategy groups, except commodities, being positive.
The strong performance of Citco-administered hedge funds highlights their ability to deliver both diversification and returns for investors. Investors are taking full advantage of this, with inflows increasing in Q2. The funds with the highest assets under administration (AUA) made the highest weighted average return, underscoring the importance of scale in the industry.
Monthly data indicates that equity strategies continued to be strong in June 2025, delivering a 3.4% return, followed by Global Macro (2.9%) and Event Driven (2.4%) strategies. The monthly overall weighted average return for June was 2.5%, with 76% of funds positive—consistent with the quarterly trend.
In summary, the Citco-administered hedge fund universe in Q2 2025 was marked by broad-based positive returns driven by multi-strategy and equity funds, strong performance among large AUA funds, sustained capital inflows, and continued recovery from prior quarter uncertainties.
- Investors capitalized on the strong performance of Citco-administered hedge funds in Q2 2025, as evidenced by the $10.7 billion net inflows and the focus on investing in funds with large assets under administration (AUA) for their potential for higher returns.
- In the financing and investing landscape, asset servicing played a crucial role in the success of Citco-administered hedge funds, as demonstrated by the record-breaking 170,000 payments processed by Citco's middle office solutions team.
