PivotalPath Found the Ten Largest Multistrategy Hedge Funds Run About $2.2 Trillion of Gross Assets on $360 Billion of Net Capital, Roughly Six Times Leverage:

Research from PivotalPath, reported by HedgeCo.Net, indicates that the largest multistrategy hedge funds are increasingly exposed to overlapping positions and high leverage, raising the risk that a market shock could produce widespread losses and forced selling. The ten firms in the study managed about $2.2 trillion in gross assets, including borrowed capital, at the end of 2025, more than triple their exposure in 2018. Their combined net assets of $360 billion imply leverage of roughly six times investor capital.

Leverage was concentrated among the six firms that operate multiple investment pods, which used between eight and 14 times their net capital. PivotalPath also found that the U.S. equity holdings of the ten largest multistrategy firms overlap more with one another than with other hedge funds, and that their returns have become more correlated since 2019. According to the firm, this points to growing exposure to common market risks rather than the diversification the model is designed to provide.

PivotalPath cautioned that a simultaneous shock hitting highly leveraged managers with concentrated positions could amplify selling and create liquidity problems, particularly for funds with shorter redemption periods. The firm stressed that the findings do not signal imminent disruption, and noted that larger platforms increasingly rely on multi-year investor lockups to reduce liquidity risk.

The report raises a central question for allocators: whether pod-level risk limits, which manage each team in isolation, adequately capture firm-level crowding that emerges when many teams hold similar positions. Lockups address redemption risk but do not alter how a leveraged book behaves in a fast unwind.