Hedge Funds Have Made Back Their War Losses

Hedge funds have finally recovered from the initial drawdowns caused by the Iran war, though returns remain below pre-war trajectories. This recovery lag may drive increased risk-taking as managers attempt to catch up to original annual targets.

Key Takeaways

• 1.Hedge funds have recovered aggregate losses sustained since the start of the Iran war, though the recovery is marginal.
• 2.Macro/CTA and global funds saw a sharp drawdown in risk appetite during the initial conflict, erasing strong early-year gains.
• 3.Performance remains behind the pre-war trajectory, potentially creating pressure for managers to chase market rallies.

Table of Contents

• Hedge Fund Returns Were Stymied by the War
• Iran War Hit Hedge Funds' Returns

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