News Digest: Hedgeweek Alpha Hunting CIO Sentiment Review 2025
October 17, 2025
The Hedgeweek Alpha Hunting CIO Sentiment Review 2025 reflects a widespread conviction among hedge fund Chief Investment Officers (CIOs) that market dispersion and volatility are here to stay, fundamentally reshaping how the industry pursues alpha. The consensus is that the era of low-cost beta (market-driven returns) has ended, forcing a critical pivot toward active strategies that capitalize on global fragmentation, central bank divergence, and systemic geopolitical risk.
A primary finding highlights the overwhelming confidence in Relative Value (RV) strategies, especially within fixed income and credit markets. The persistent interest rate differentials and varied yield curve shapes globally, driven by unique domestic inflation and labor dynamics, present clear mispricing opportunities. Funds are positioned to exploit the “positive carry trade,” borrowing in low-rate currencies and investing in high-yield debt, magnifying small, predictable gains.
The report also underscores the vital role of systematic and quantitative strategies. The sheer complexity of modern macro factors, coupled with the need for high-speed execution, necessitates advanced data processing and algorithmic capabilities to identify and capture fleeting market inefficiencies. Consequently, CIOs report a strong focus on recruiting talent in machine learning and data science to enhance these systematic platforms.
Furthermore, geopolitical instability has transitioned from a mere tail risk to a core thematic driver of alpha. Managers are actively deploying capital into defensive and strategically important sectors like defense, aerospace, and secure energy infrastructure, betting on sustained, structural increases in government spending worldwide. The US Dollar and gold are frequently cited as default sanctuary assets during escalating crises.
In summary, the 2025 sentiment is defined by a flight to idiosyncratic alpha. Success will hinge on a manager’s ability to synthesize complex global macro trends, such as the structural inflation driven by deglobalization and the breakdowns in high correlations caused by central bank actions, into precise, high-conviction, directional or relative-value bets.
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