News Digest: Hedge Fund Allocations Rise as Alpha Generation Improves
February 12, 2025
News Digest:
A new survey by BNP Paribas’ Capital Introduction team reveals a strong shift towards hedge fund allocations, with 61% of investors planning to increase exposure in 2025, deploying over $30 billion—a 38% jump from 2024.
The survey, conducted in December 2024 and January 2025, gathered insights from 229 allocators managing $1.4 trillion in hedge fund assets, representing nearly a third of industry AUM. Key findings indicate hedge funds delivered 10.12% returns in 2024 with significantly lower volatility than the broader market, reversing zero alpha generation in 2023 to 2.62% in 2024.
Asia-Pacific is the top growth region for 2025, with over 25% of investors planning to increase exposure. Japan remains a key focus, while China, after two years of capital flight, is seeing a reversal, with 7% of investors planning to add allocations.