Sep 9, 2026 · 44 min · 12 segments
Freddie Parker, Co-Head of Prime Insights and Analytics at Goldman Sachs, returns to The Long-Short to unpack the first half of the year: where hedge funds made money, which trades became crowded, how…
Freddie ParkerGuest
Drew NicolHost
So echoing, I think, your earlier comments, really, um, the thing that stands out far and away is the strength of performance thus far this year.
Um, put that in broader context, if you look back at the last ten years, the average half yearly return for hedge funds was about four point one percent.
Um, so we've seen a, a pretty consistently strong period for, for a few years now.
Um, that first half of this year really picked up where the second half of 'twenty five left off in terms of delivering really strong performance momentum, um, and, um, was, I think, not just notable in terms of the quantum of returns, but the breadth of those returns.
So really most strategies had a very strong start to the year, um, and as of the, the end of the first half, we're on track to outperform twenty twenty-five on a, on a straight line basis.
Um, it was, it was an environment of some dispersion, um, at both the strategy and a fund level.
So, uh, at a strategy level, you had equity long-short, which really, um, was the outstanding strategy to the upside, somewhat more muted performance from some pockets of what we call the uncorrelated strategies complex, so discretionary macro, quant and so on.
Um, but nevertheless, uh, I think taking in the round, um, very strong, um, and then a fair amount of dispersion at the fund level as well.
But I would say for the most part, actually, if you look at dispersion in terms of where do the, where do the quartiles fall, where the percentiles fall, the dispersion skews towards the upside, which is always good to see.
Um, and then as you look at how asset allocators are responding to that, um, the messaging continues to be very positive.
Um, but actually more encouraging than that is not just what allocators are saying, but, but how they're moving their feet.
And we see, um, not just a significant pickup in inflows year to date, um, but also a real broadening of those inflows.
So overall, the, the allocator behavior, um, seems to be very positive as well.
And as we look into the second half of the year, we a- we anticipate that continuing, um, with, uh, hedge fund searches across strategies continuing to, to trend higher, and, and our expectation is that those inflows should continue.
Well, it's always good to hear that there is a broadly rosy picture for the hedge fund landscape out there.
Before we dive into the details of this report, it might be worth just taking a moment to join the dots from when we last spoke, uh, which was earlier in the year, I think, when you, you put out your beginning of the year report.
When we spoke then, you made the point that the higher rates and then the greater market dispersion had created something of a new era for hedge funds if you look at it over a multi-year period.
Now, where we are today after, uh, an equally strong first half to the year ended with quite a turbulent July, how has that thesis strengthened for you? Uh, what has challenged it? And, and do you really feel like we are now in a, a, a new paradigm, or is this sort of a continuation of that favorable period that we spoke about before?
So echoing, I think, your earlier comments, really, um, the thing that stands out far and away is the strength of performance thus far this year.
Um, put that in broader context, if you look back at the last ten years, the average half yearly return for hedge funds was about four point one percent.
Um, so we've seen a, a pretty consistently strong period for, for a few years now.
Um, that first half of this year really picked up where the second half of 'twenty five left off in terms of delivering really strong performance momentum, um, and, um, was, I think, not just notable in terms of the quantum of returns, but the breadth of those returns.
So really most strategies had a very strong start to the year, um, and as of the, the end of the first half, we're on track to outperform twenty twenty-five on a, on a straight line basis.
Um, it was, it was an environment of some dispersion, um, at both the strategy and a fund level.
So, uh, at a strategy level, you had equity long-short, which really, um, was the outstanding strategy to the upside, somewhat more muted performance from some pockets of what we call the uncorrelated strategies complex, so discretionary macro, quant and so on.
Um, but nevertheless, uh, I think taking in the round, um, very strong, um, and then a fair amount of dispersion at the fund level as well.
But I would say for the most part, actually, if you look at dispersion in terms of where do the, where do the quartiles fall, where the percentiles fall, the dispersion skews towards the upside, which is always good to see.
Um, and then as you look at how asset allocators are responding to that, um, the messaging continues to be very positive.
Um, but actually more encouraging than that is not just what allocators are saying, but, but how they're moving their feet.
And we see, um, not just a significant pickup in inflows year to date, um, but also a real broadening of those inflows.
So overall, the, the allocator behavior, um, seems to be very positive as well.
And as we look into the second half of the year, we a- we anticipate that continuing, um, with, uh, hedge fund searches across strategies continuing to, to trend higher, and, and our expectation is that those inflows should continue.
Well, it's always good to hear that there is a broadly rosy picture for the hedge fund landscape out there.
Before we dive into the details of this report, it might be worth just taking a moment to join the dots from when we last spoke, uh, which was earlier in the year, I think, when you, you put out your beginning of the year report.
When we spoke then, you made the point that the higher rates and then the greater market dispersion had created something of a new era for hedge funds if you look at it over a multi-year period.
Now, where we are today after, uh, an equally strong first half to the year ended with quite a turbulent July, how has that thesis strengthened for you? Uh, what has challenged it? And, and do you really feel like we are now in a, a, a new paradigm, or is this sort of a continuation of that favorable period that we spoke about before?
The rest of this transcript — segmented and speaker-labeled, so you land on the exact moment something was said
Search every transcript — by keyword, by phrase, or by meaning, across every show Radar indexes
Trends — what is surging across podcasts, measured against its own baseline
Alerts — when a name you follow appears in a newly indexed episode
No account is needed to search Radar.
