Hedge Funds See Bright Outlook Amid Uncertain Markets

The global hedge fund industry continues to gather pace, with assets under management expected to rise to USD 5 trillion by 2028 and to USD 5.5 trillion by 2030. The industry could continue to attract capital as investors look for alternatives in a volatile and uncertain market.

Hedge funds are seeing renewed interest from asset managers, particularly pension funds and insurers, which might increase allocations to this type of funds this year. The shift reflects persistent concerns over market volatility, macroeconomic uncertainty, and the limitations of conventional portfolio construction models. Against this backdrop, hedge funds could act as channels for diversification, active risk management and idiosyncratic return generation.

 Although overall fund launch activity remains steady, a handful of larger, well-capitalised entrants have drawn attention. At the same time, fee structures are receiving closer scrutiny, ESG adoption, though uneven, remains under review, and advances in data science and artificial intelligence are playing a more prominent role in investment processes. These developments are influencing capital allocation decisions and contributing to a gradual evolution in the structure of the hedge fund industry.

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