Hedge Fund Outlook

BNP Paribas' 2026 outlook reveals high allocator confidence in hedge funds following a year of target-beating returns (10.53%), with 66% of investors planning to increase allocations.

Key Takeaways

• 1.Hedge funds successfully met investor targets in 2025, delivering 10.53% returns (Cash + 641 bps).
• 2.Allocator sentiment is bullish for 2026, with 66% planning to increase hedge fund allocations, potentially adding $24 billion in net inflows.
• 3.Europe and Asia Pacific are the primary allocation hotspots, with 34% and 30% of allocators respectively planning to add exposure in 2026.

Table of Contents

• METHODOLOGY & RESPONDENT PROFILE
• HEDGE FUND PERFORMANCE TRENDS & PREDICTIONS
• HEDGE FUND ASSET FLOWS TRENDS & PREDICTIONS
• HEDGE FUND PORTFOLIO CONSTRUCTION & PLANS
• HEDGE FUND STRATEGY ALLOCATION PLANS
• HEDGE FUND FEES
• SEPARATELY MANAGED ACCOUNTS
• PORTABLE ALPHA & ACTIVE EXTENSION

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