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Preqin Quarterly Update: Hedge Funds Q4 2022



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In this report:

A focus on risk

Equity interest eases

Investor appetite

The industry in 2023
Download the full Preqin Quarterly Update report and datapack. Exclusively for Insights+ subscribers.

quarterly update | insights+
Hedge funds returned 2.62% to investors in the fourth quarter, helping investors to reduce some of their 2022 losses

By Sam Monfared, PhD, CFA, CAIA

January 31, 2023


Without doubt, the third quarter of 2022 was incredibly tough for equity and bond markets, but the environment changed in the final quarter of the year. Equity markets rebounded in the last quarter and yields declined slightly. The S&P 500 PR Index and international developed equities (VEA) reversed course, climbing by 7.08% and 16.78%, respectively, while US investment grade credit (LQD) and international bonds (OIBAX) climbed by 4.21% and 10.12%, respectively, during the quarter. The annualized third-quarter GDP for the US was reported at 3.2%,[1] exceeding expectations after two back-to-back negative quarters for GDP figures. The eurozone economy also grew by 0.3% in the third quarter, despite challenges in the region.[2] The positive numbers didn’t impact central banks’ plans to bring inflation under control, and the US Federal Reserve (the Fed), the European Central Bank (ECB), and the Bank of England (BoE) continued to raise interest rates aggressively.

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Fig. 1: Performance of hedge funds in Q4 2022 by structure* *Please note, all performance information includes preliminary data for December 2022 based upon net returns reported to Preqin in early January 2023. Although stated trends and comparisons are not expected to alter significantly, final benchmark values are subject to change.
Fig. 2: Performance of hedge funds vs. the S&P 500 PR Index* *Please note, all performance information includes preliminary data for December 2022 based upon net returns reported to Preqin in early January 2023. Although stated trends and comparisons are not expected to alter significantly, final benchmark values are subject to change.
Fig. 3: Cumulative returns of hedge funds in Q4 2022 by geographic focus* *Please note, all performance information includes preliminary data for December 2022 based upon net returns reported to Preqin in early January 2023. Although stated trends and comparisons are not expected to alter significantly, final benchmark values are subject to change.
Fig. 4: Hedge fund launches in Q4 2022 by structure
Fig. 5: Hedge funds launches by top-level strategy, Q1 2022 – Q4 2022
Fig. 6: Amount of fresh capital investors expect to invest in hedge funds over the next 12 months


[1] Gross Domestic Product
[2] GDP main aggregates and employment estimates for the third quarter of 2022

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In an ever-changing economic environment, private capital markets reflect the impacts of global political changes, government and regulatory scrutiny, technological advances, public opinion, and consumer behavior. Fund managers, investors, and those working with them need to adapt - and fast.

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