Goldman says hedge funds on track for best month in over a decade

Goldman Sachs said hedge funds were on track for their best monthly performance in more than a decade, with long-short stock pickers up 7.7% month to date through Tuesday’s close. For Goldman’s prime brokerage clients, that is more than a clean headline: it is a sign that the same managers who spent March de-risking are back to taking shots.

The rebound mattered because it followed a rough March, when Iran-related turmoil hit returns across the hedge fund universe. Goldman said hedge funds across strategies still gained 1.6% in the first quarter, even after a 1.8% decline in March. The firm said the latest move would be the strongest month since it began tracking the data in 2016, which makes the swing feel less like a routine bounce and more like a reset in positioning.

That is the kind of turn Goldman’s sales, financing and trading desks watch closely. Hedge funds are a core client base for Goldman Sachs Prime Services, as well as the firm’s equities, derivatives and financing businesses. When clients are putting money back to work, they tend to borrow more, trade more and lean harder on risk transfer products. Goldman’s 2025 annual report said the Global Banking & Markets franchise was expected to benefit from strong client flows across FICC and Equities, and said firmwide net revenues rose 9% to $58.3 billion in 2025.

The April data also fits with Goldman’s February hedge-fund outlook, which said hedge funds delivered double-digit returns for a second straight year in 2025. Goldman said nearly half of asset allocators expected to increase hedge-fund exposure in 2026, and more than 90% said their hedge-fund portfolios met or exceeded expectations. The firm also said the strongest investor interest was in quantitative and discretionary macro funds, a reminder that clients still want strategies that can move independently of stocks and bonds when correlations rise.

For Goldman staff, the takeaway is not just that hedge funds are recovering. It is that clients are recovering with more confidence, after a volatile stretch that pushed many funds into defense in March. Goldman’s own hedge fund trend work last year analyzed 695 hedge funds with $3.1 trillion of gross equity positions, and said the average U.S. long-short equity hedge fund was up 3% year to date at that point. Now, with Asia- and China-focused managers leading gains and allocators still willing to add exposure, the prime brokerage ecosystem looks healthier than it did just weeks ago. That usually translates into a better backdrop for the desks that live closest to the money.