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Hedge fund giants Millennium and Citadel delivered a double-digit return to investors in 2025, recovering after a lacklustre first half but lagging behind many smaller firms in the “multi-manager” sector.

Izzy Englander’s Millennium and Ken Griffin’s Citadel were both briefly in the red in the first few months of last year, as markets were rocked by US President Donald Trump’s trade war.

But the firms recovered to gain 10.5 per cent and 10.2 per cent, respectively, by the end of 2025, following months of steady returns in the second half of the year, said people who had seen the numbers.

The recoveries partly reflect a return to more normal market conditions after Trump backed away from many of his most aggressive tariffs, allowing equity indices to chalk up strong gains by the end of the year. The S&P 500 finished 16.5 per cent higher while the UK’s FTSE 100 gained 21.5 per cent.

Millennium and Citadel were outshone by many of their smaller rivals in the multi-manager sector, including ExodusPoint, which gained 18 per cent, and Schonfeld’s flagship fund, which gained 12.5, said people who had seen the numbers.

Multi-manager firms have risen to the top of the hedge fund industry over the past several years by operating hundreds of trading teams known as “pods” across multiple asset classes such as equities, bonds and commodities. These hedge funds are known for heavy use of borrowing to juice their returns but also strict central risk management that often forces traders to quickly exit losing positions.

In addition, they charge investors higher fees than traditional hedge funds by passing through a host of costs, such as bonuses and client entertainment, directly to investors.

Their model has generally delivered consistent returns over the past decade, satisfying a desire from large investors such as pensions for steady profits.

These firms do not benchmark themselves against equity indices such as the S&P 500, instead trying to make their investors money whether stocks rise or fall. For instance, many multi-manager firms were up in 2022 when equity markets sustained big losses.

Elsewhere, macro hedge funds had their best year since 2008, with Bridgewater’s Pure Alpha hedge fund up 33 per cent to December 29, the most profitable year for the firm since it was founded 50 years ago.

Millennium, ExodusPoint, Schonfeld, Bridgewater and Citadel declined to comment.