In the first half of 2025, 262 new hedge funds launched, according to the HFR Market Microstructure Report. That put 2025 on pace to surpass the estimated 479 launches the previous year, the highest annual total since 2021.
Early-stage funds outperform mature ones
New managers are critical to the evolution of the hedge fund industry. In fact, new research indicates that these new funds beat more mature funds — at least in their early years of operation.
PivotalPath held a webinar with Borealis about the research it published looking at some of the key performance metrics of new managers. The two firms also discussed how new managers can translate their early success into long-term success for their investors.
Also see: 2026 Hedge Fund Trends: Mega-Funds, AI, Quants, And Talent Wars To Dominate Headlines
On the webinar, Dan Harris of Borealis authored the research and joined PivotalPath CEO Jon Caplis and Felix Lo of the event-driven fund Trium Khartes, a top-percentile hedge fund fund that has transitioned successfully from new manager to maturity as it crosses the four-year mark.
Solving problems with the research
Giving an overview of his research, Harris said the “punchline” was that “early-stage managers outperform.” Of course, it’s not a new idea; there’s been much debate and research about this topic spanning mutual funds, venture capital funds, private equity funds, and hedge funds.
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