Thoughts
Podcast: Hedge Fund hit best Quarter in a decade and the Shadow Footprint revolution
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On the agenda for this episode, Declan Quilligan, Head of Hedge Fund Services, Citco Fund Services, is joined by Peter Kane, Head of Hedge Funds – North Americas, on the latest AFI podcast to discuss Q2 performance and the rise of shadow footprint evolution reshaping fund administration.
The standout story of Q2 was exceptional performance paired with unprecedented investor appetite. Hedge funds administered by Citco achieved a weighted average return of 12.3% in the second quarter, well ahead of the recent quarterly high of 8.3% seen last year. Beyond the headline numbers, the conversation explored how hedge fund managers are fundamentally rethinking their operational footprints – with rising costs and intense competition for alpha, fund managers have significantly rethought the structure of their internal middle- and back-office operations.
Key takeaways
- H1 2026 delivered exceptional performance and flows tailwinds carrying the industry into the second half of the year
- Multi-strategy funds were a particular bright spot, attracting $28.4bn of net inflows during Q2
- The technology revolution is redefining operational efficiency and competitive advantage in fund administration
- Managers are increasingly focused on outsourcing non-core functions to specialists while concentrating on alpha generation
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