For hedge funds, the word for 2025 was whipsawed.
As PivotalPath’s Gwyn Roberts put it, “Every time trend funds have begun to latch on to a market move this year, it has changed.”
The year began with promise.
In January, International Banker reported that momentum from continued monetary easing, US election results, geopolitical developments and ongoing market volatility seemed poised to make 2025 a “vintage” year for hedge funds.
But by mid-year, sentiment shifted.
Changes to trade policy caused global stocks to tumble on “Liberation Day,” leaving investors unsure about the global outlook. Markets did recover, but volatility and geopolitical uncertainty continued to challenge trend-following strategies.
By June, Reuters noted that the year’s high volatility had created a sharp divide: Some funds capitalized on rapid swings, while others—constrained by algorithms or slower execution—struggled to keep pace.
More recently, as Federal Reserve rate cuts and M&A activity, including strategic corporate investments in AI, gained momentum and geopolitical tension began to ease, performance heading into the fourth quarter began to surge, according to research from HFRI.
After a year defined by sharp reversals and uneven performance, 2025 was also the year that allocators began to take an even harder look at how hedge funds operate, not just how they perform.
Today, allocators prioritize managers who demonstrate a robust operational infrastructure and can deliver transparency, agility and control, no matter how volatile the environment becomes.
In this post, we explore what allocators expect from hedge funds in 2026 and beyond — and the critical role technology plays in helping hedge fund managers build the robust operational infrastructure needed to keep pace with market volatility and investor demands.
Market Volatility Puts Emphasis on Hedge Funds’ Operational Infrastructure
This year, building allocators’ trust looked very different from what it did even a few years ago.
Not long ago, robust operational infrastructure was a differentiator — a way to showcase a hedge fund’s sophistication. Today, as volatile markets expose weaknesses, operational resilience is now a key determinant of credibility.
Without institutional-grade systems, many allocators won’t even take the first meeting.
Hedgeweek’s report, The New Rulebook: How Operational Infrastructure is Becoming Hedge Funds’ Make or Break Investment, highlights how quickly expectations have shifted. Survey data from allocators, hedge fund experts and managers show that what was once a competitive edge has now become a minimum requirement.
In North America, 82 percent of allocators have increased the rigor of their ODD reviews over the past two to three years. In Europe, 40 percent have done the same, while another 60 percent report maintaining already-high standards.
In an environment defined by whipsaw markets and rapid reversals, allocators are no longer just evaluating returns; they are looking for funds that can deliver transparency, maintain accurate, timely reporting and respond quickly to market changes.
Lacking these capabilities no longer raises concern — it ends conversations.
The Shadow Book of Records: A Hedge Fund Necessity in 2026
In 2025, increased regulatory scrutiny, multi-asset strategies and complex investment structures challenged hedge funds.
Rapidly shifting markets have exposed weaknesses in reporting, reconciliation and risk monitoring. These weaknesses make operational transparency more critical than ever.
A shadow book of records, for example, acts as a trusted, independent “source of truth,” validating trades, positions, cash balances and valuations across multiple systems and counterparties.
Today, according to the Hedgeweek research, nearly 90 percent of North American and European allocators now consider shadow books of records essential.
In a volatile market, the ability to reconcile positions quickly and maintain accurate P&L reporting can mean the difference between confidence and concern.
Today, a shadow book is no longer a nice-to-have — it is a core operational requirement, ensuring transparency, auditability and trust in both performance and risk management.
Managed Services: Driving Operational Excellence and Allocator Confidence
In 2025, as allocators demanded greater transparency, resilience and control, managed services were looked to as a strategic advantage.
Rather than building and maintaining every system in-house, managers can leverage vendor platforms and co-sourced services to handle functions such as reconciliation, data onboarding and post-trade processing.
In today’s environment, the most successful hedge funds are those that combine sophisticated investment strategies with reliable operational support — meeting allocator expectations and positioning their firms for long-term growth.
Multi-Asset Platforms: Launch, Scale and Grow Without Operational Limits
In their 2025 Hedge Fund Outlook report, With Intelligence highlights the industry’s global expansion and migration into new asset classes as evidence of its increasing maturity.
While these trends have been developing for years, in 2025, many hedge funds still face challenges in establishing the operational foundation needed to maximize performance across global, multi-asset strategies – from equities and options to FX, fixed income, CDs, derivatives and swaps.
To manage this complexity effectively, hedge funds require a comprehensive, multi-asset management platform that unifies trading, accounting and reporting across all asset classes. Such platforms enable funds to launch new strategies or products, accommodate growing investor demands and scale transaction volumes without increasing operational strain.
Beyond scalability, an integrated platform reduces the risk of errors from out-of-system processes, enables faster, more informed decision-making and strengthens risk management and compliance.
In 2025, with allocators demanding transparency, accuracy and operational resilience, funds leveraging multi-asset solutions were better positioned to meet these expectations while navigating volatile markets.
Preparing Your Hedge Fund for 2026
2025 was a year of whipsaw markets, heightened volatility and rapidly shifting investor demands. Amid the turbulence, hedge fund managers worked to meet rising allocator expectations while staying agile enough to pursue alpha across evolving strategies.
Looking ahead, HFRI projects that the late-2025 gains will carry into 2026 — along with continued risk and volatility.
In this climate, robust operational infrastructure is no longer a competitive edge; it’s essential to sustaining growth, maintaining allocator trust and thriving in 2026 and beyond.
To meet these demands, hedge funds rely on Eze Eclipse — an institutional-grade investment infrastructure that scales with their businesses. Its flexible, cloud-native architecture supports the full investment lifecycle across asset classes within a single, unified platform.
Hundreds of firms trust Eclipse to streamline operations, enhance transparency and adapt to change. Users can access real-time data securely from anywhere via web browser or mobile device.
And as a fund’s needs evolve, Managed Services allow managers to delegate routine workflows to specialized accounting and operations experts, empowering their firms to scale efficiently without adding overhead.
Learn More
Learn more about allocators’ evolving demands by downloading your copy of the latest research: The New Rulebook | How Operational Infrastructure is Becoming Hedge Funds’ Make-or-break Investment. To dive deeper into the Hedgeweek research, watch our recent webinar.
Get in touch to learn how Eze Eclipse can provide the institutional-grade infrastructure your hedge fund needs at launch and throughout the growth of your fund.
