Investors are optimistic about the market, with a significant majority planning to make new hedge fund allocations in the second half of 2024.
Increased asset inflows are driven by fresh capital and a growing adoption of portable alpha strategies.
Marlin Naidoo, Global Head of Capital Introduction, BNP Paribas
New research by the BNP Paribas Capital Introduction team which surveyed 197 allocators from 15 countries that manage or advise on over US 870bn in hedge fund assets (HF AUM), reveals that equity strategies are dominating their interest.
According to Marlin Naidoo, Global Head of Capital Introduction at BNP Paribas: “Investors are turning to hedge funds in response to today’s volatile markets. Our survey indicates a strong trend towards increased asset inflows, driven by fresh capital and a growing adoption of portable alpha strategies.”
Key takeaways
Hedge funds in high demand
- 86% of investors are planning to make new hedge fund allocations in the second half of 2024.
- Of these, 26% will be allocating using new cash, with the remainder coming from capital rotation.
Equity proves popular
- Fundamental equity strategies dominate investor interest, with 61% looking to allocate to such strategies.
- Credit and discretionary macro follow, with over a third of investors looking to add here.
US and Europe dominate
- 74% of investors plan to allocate to the US, and 51% are targeting Europe.
- APAC features less heavily, with 27% of investors planning to allocate to the region. Only 7% of investors are planning to allocate to China, and 8% to India.
Portable alpha: In focus
- Over half of pension and sovereign wealth funds are invested already, with the majority of these investors planning to further increase their allocation.
- Fundamental equity was the most popular portable alpha component used by investors.
For more information, contact our Capital Introduction team: dl.capintro@uk.bnpparibas.com