In 2025, major hedge funds like D.E. Shaw, Bridgewater, and Balyasny achieved significant double-digit returns, driven by a strong stock market rally fueled by AI enthusiasm and market volatility, with Bridgewater's Pure Alpha fund posting a record 34% gain.
Hedge funds posted strong gains in 2025, with Bridgewater's Pure Alpha II fund achieving a record 34% return and D.E. Shaw's strategies gaining up to 28%, driven by US stock surges and market volatility amid trade wars, marking one of the best industry performances in five years.
Bridgewater Associates' flagship Pure Alpha hedge fund surged 33% in 2025, marking its highest profit in 50 years, driven by strong U.S. stock market gains and strategic investments in AI-driven funds, outperforming major indices and reflecting successful diversification and leadership transition.
Bob Prince, co-chief investment officer at Bridgewater Associates, has expressed skepticism about the hopes for further rate cuts by the Federal Reserve, stating that the market's expectations are "off track." Prince believes that the Fed's current policy stance is appropriate and that the central bank should focus on maintaining a balance between supporting economic growth and controlling inflation.
Bridgewater's co-chief investment officer, Bob Prince, warns about the long-term effects of a massive wealth shift from the public sector to the private sector, resulting in a significant increase in U.S. government debt to GDP ratio. Prince highlights the vulnerability of debt rollovers and gross issuance in the coming decades, with the U.S. issuing 25% of GDP in debt annually. He emphasizes the importance of paying attention to the geopolitical risks associated with foreign investors and central banks holding a significant portion of the debt. Additionally, Prince notes that the private-equity boom fueled by abundant free money is slowing down as interest rates rise.