Investor interest in U.S. hedge funds is slowing for the first time since 2023, following talk of a potential shift away from U.S. investments since April. A survey of 342 investors, managing $7.8 trillion in assets, revealed that investors in the U.S. and Europe plan to increase their exposure to U.S.-based hedge funds by 5% less than in 2025. The survey, conducted by Barclays, also indicated a growing appetite for hedge fund managers in Asia and Europe.
Interest in Asia-Pacific-based hedge funds has more than doubled since 2024, according to the Barclays report. Similarly, U.S. interest in European-based hedge funds has more than doubled. European investors surveyed expressed an 8% greater willingness to invest in European managers compared to the previous year, while interest in Asia-based managers grew by approximately 10%.
Hedge fund fees remain historically high, respondents told Barclays. Average management and performance fees peaked in 2025 for traditional hedge fund products, while pass-through costs have decreased. Since 2023, investors’ share of gross returns has increased from about 47% to 56%, with overall hedge fund returns growing by approximately 5% this year.
While the biggest hedge fund multi-managers continue to grow—with assets under management increasing at an annual rate of about 17% since 2017, reaching $435 billion last year—they were not the top strategy pick. Hedge funds using macroeconomic factors and those trading stocks systematically saw the highest levels of net allocations in 2025. Overall, the hedge fund industry expanded by just over a fifth between 2023 and 2025, marking its most significant two-year increase since 2011-2013.
