Hedge funds in Europe are seeing renewed investor demand as allocators shift exposure away from the US amid heightened policy uncertainty and tariffs, according to a report by Reuters citing BNP Paribas’ latest Hedge Fund Outlook survey.
The survey of 140 investors overseeing $960bn in hedge fund-related assets found that Europe was the top destination for new allocations in H1 2025, with 37% of investors adding capital. A further 33% plan to boost European exposure in the second half of the year. Asia-Pacific also attracted stronger interest, while just 14% of respondents expect to increase commitments to North American hedge funds.
Overall, Europe captured more than half of net inflows, leaving the US and Asia to share the remainder. Smaller and mid-sized managers – those under $10bn AUM – were the biggest beneficiaries.
By strategy, credit hedge funds led with $4.5bn in inflows, followed by multi-manager platforms and equity long/short funds.
Despite the regional rebalancing, the investor base remains heavily US-centric, with 73% of allocators surveyed based in North America, compared with 32% in Europe and 23% in Asia (ex-Japan).
