Multi-Strategy Hedge Funds: Jack of All Trades?

Or Master of None?

March 2023. Reading Time: 10 Minutes. Author: Nicolas Rabener.

This research note was originally published by the CAIA Association’s blog.


  • A few select multi-strategy hedge funds generated outsized returns in 2022
  • However, the average fund lost money
  • The average fund can be simply replicated via the S&P 500 & cash


Citadel made $16 billion in profits in 2022, Millenium $8.0 billion, and Point 72 $2.4 billion. These returns are spectacular as all three are multi-strategy funds that allocate capital to hundreds of trading teams. The goal is to harvest excess returns from many different sources and create a diversified portfolio. The expected return should be low, but consistently positive and not very volatile. Citadel’s 38% return in 2022 had anything but these features.

Given such stellar performance, the interest in multi-strategy hedge funds is rising again. We have explored this hedge fund type before and have not come away with a particularly positive impression (read Multi-Strategy Hedge Funds: Equity in a Different Shade?). This article is a second take on multi-strategy hedge funds.


Reviewing the assets under management of multi-strategy hedge funds based on data from BarclayHedge highlights that these were approximately $300 billion between 2017 and 2020, but doubled thereafter. Perhaps this indicates that these funds have done well during the COVID-19 crisis that began in March 2020 and were rewarded with new capital from allocators thereafter.