Top 100 hedge funds lagged behind average in H1 2026
VIP hedge funds returned 6% YTD, impacted by March drawdown
NEW YORK, LONDON, October 15, 2026 – The top 100 global hedge funds saw lower returns compared to the rest of the sector in H1 2026, according to new data from Canoe Intelligence, a Bloomberg company.
The Canoe Hedge Fund VIP Performance Report Q2 2026 found that the Canoe Total Hedge Fund VIP Index, which tracks performance across the 100 largest hedge funds (representing approx. $3.2 trillion in institutional allocations), lagged slightly behind all hedge funds in total. The VIP index returned 6.0% compared to the 7.0% returned by the Hedge Fund total Index.
Typically, large hedge funds are well protected against market shocks, however in March 2026, VIP funds saw the biggest drop from its peak when drawing down at a maximum of 3.2%. This was in line with the 3.3% benchmark for the entire Hedge Fund Index. This drawdown was driven by the energy shock tied to the Iran conflict. Nevertheless, VIP fund managers were able to stage a strong rebound, particularly through long/short equity (LSEQ) strategies.
LSEQ strategies from VIP hedge funds have consistently outperformed their peers. Despite the March drawdown, VIP LSEQ funds are up 9.2% in the first half of 2026, compared to 8.9% of all hedge fund LSEQ strategies, and 6.2% for the S&P 500 60% exposure benchmark. For 2025, VIP LSEQ funds outperformed other hedge fund LSEQ strategies, up 21.4% compared to 14.8%
Additionally, the report found that multi-manager platforms have been able to effectively navigate market volatility with minimal drawdowns. During March 2026, multi-manager platforms drew down 1.25%; their largest draw in three years. These platforms have robust risk mitigation strategies, diversify risk across different strands, and are able to shift capital dynamically. So even in the event of a drawdown seen at the scale in March, these platforms are able to contain the downside.
One area in which smaller funds outperformed their larger counterparts was in regards to the Relative Value and Arbitrage strategies. In H1 2026, VIPs only returned 2.9%, compared to the broader Relative Value index returning 5.4%. While smaller funds accept more volatility, they are also seeing more of the upside. Relative Value and Arbitrage strategies favor speed and agility, and therefore executing at scale is more difficult for VIP funds who have more complex chains of approval.
Mike Muniz, Chief Strategy Officer, Canoe Intelligence, a Bloomberg company, said: “A month like March shows why granular data matters. Even the largest hedge funds drew down almost in line with the broader index, yet multi-manager platforms held losses to about 1.3% and nearly all recovered by April. Without complete, net-of-fees return histories for the biggest managers, that difference stays invisible.”
“The same is true of size. The largest long/short equity funds have led their smaller peers in every full year since 2023, while smaller relative value funds have kept the edge. The answer changes by strategy, and allocators need data that reflects what LPs actually receive to see it. That is the gap this index closes, and Canoe will update it every quarter.”
The full Q2 2026 Canoe Hedge Fund VIP Performance Report is available here.
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About Canoe Intelligence
Canoe Intelligence (“Canoe”), a Bloomberg company, is the intelligence infrastructure powering how the world invests in alts. Our AI-native platform automates the manual data processing, cutting operational costs and risk while future-proofing alts infrastructure for long-term growth. Timely, accurate, and comprehensive data arms investment teams to act with the decisiveness of public markets. With Canoe, it’s all about making Alts, smarter.
Learn more at www.canoeintelligence.com.
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