The Alpha Renaissance | Why Hedge Funds Are Thriving Again

Hedge funds posted their best performance in over a decade in 2025, with the PivotalPath composite index gaining 11.9%—the strongest showing since 2013. Institutional investors are responding: nearly half plan to increase hedge fund allocations in 2026, the highest level in survey records. This resurgence comes after what JPMorgan memorably termed the "alpha winter" of the 2010s, when zero interest rates, low volatility, and high stock correlations made active trading strategies nearly impossible to execute profitably. The conditions that crushed hedge funds for a decade have now reversed—and the industry is capitalizing.

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