Hedge Funds Just Posted Their Fastest Growth in History. Three Weeks Later, the Same Trade Was Down Double Digits.

HFR's record $409.3B quarter, ~8x gross leverage, and the AI-chip reversal three weeks later — what actually broke, and what amplified it.

Global hedge fund capital hit a record $5.6 trillion in Q2 2026 on the largest quarterly increase HFR has ever recorded — built in part on gross leverage near eight times NAV, concentrated in a handful of AI-chip names. And when that trade broke in mid-July, it was not a clean leverage unwind: at least four distinct triggers landed in the same window, and financing costs were only one of them.