Amid ongoing geopolitical tensions and market volatility, global investors are taking a more measured approach to risk. According to a recent Bloomberg report, as reported by Hedgeweek, Iqbal Khan and Robert Karofsky, co-presidents of UBS Global Wealth Management, say overall client sentiment remains healthy and constructive. However, notable tactical shifts are occurring under the surface of the alternative investments landscape.

Rather than expanding capital uniformly across alternatives, high-net-worth and institutional allocators are actively shifting funds between strategies to prioritize adaptability and liquidity. Hedge funds and multi-strategy vehicles are attracting increased capital allocations, as investors value their ability to pivot during market swings. On the other hand, Traditional private equity continues to maintain robust investor interest, while the appetite for private credit strategies has notably moderated.

The cooling sentiment toward private credit comes at a time of heightened scrutiny for the sector, which previously enjoyed years of aggressive fundraising growth. Recently, the asset class has been hit by elevated redemption activity and fund outflows, triggering broader industry concerns over valuation dynamics and underlying asset liquidity.

These private market pressures were recently underscored when Swiss investment manager Partners Group had to implement redemption restrictions on one of its funds following a surge in investor withdrawal requests.

End Notes

Source: https://www.hedgeweek.com/investors-opting-for-hedge-funds-over-private-credit-says-ubs-wealth-management/