The hedge fund market, which was valued at $4.8tn in 2022, is estimated to reach $13tn by 2032, exhibiting a CAGR of 10.7% between 2023 to 2032, according to a new report published by Allied Market Research.

The Global Hedge Fund Market by Strategy: Global Opportunity Analysis and Industry Forecast, 2023-2032 says that growth will be driven by an increase in investments in digital assets and advancements in technology. In addition, an evolving regulatory landscape to safeguard the interests of investors by promoting transparency, disclosure, and fair treatment has positively impacted market growth and will continue to do so.

While the high fees charged by hedge funds and regulatory scrutiny and compliance costs are expected to hamper market growth, the rise of quantitative and systematic strategies is expected to offer remunerative opportunities for the expansion of the market over the forecast period.

Long/short equity funds held the highest market share in 2022, accounting for more than one-fifth of the global hedge fund market revenue, however, the event-driven segment is projected to register the highest CAGR of 13.9% from 2023 to 2032, due to its unique approach to trading futures contracts across various asset classes such as commodities, currencies, and financial instruments.

North America held the highest market share in terms of revenue in 2022, accounting for nearly two-fifths of the global hedge fund market revenue and the region will continue to be a dominant force, accordion got the report. Asia-Pacific though is expected to witness the fastest CAGR of 13.9% from 2023 to 2032 and is expected to dominate the market during the forecast period, with the region's strong economic conditions, technological advancements, regulatory changes, and investor sentiment contributing to growth.