Hedge Fund Outlook 2026

The BNP Paribas 2026 Hedge Fund Outlook highlights a peak in investor sentiment, with 66% of surveyed allocators intending to increase exposure following a year of 10.53% average returns. Key trends include a pivot toward European and Asian markets and a significant appetite for Discretionary Macro and Quant strategies.

Key Takeaways

• 1.Hedge funds successfully met allocator return targets in 2025, yielding an average of 10.53% (Cash + 641 bps).
• 2.Investor sentiment is highly bullish for 2026, with 66% of allocators planning to increase their hedge fund exposure.
• 3.Europe and Asia Pacific are the top regional allocation hotspots, while interest in North America has cooled relative to previous years.

Table of Contents

• 01 METHODOLOGY & RESPONDENT PROFILE
• 02 HEDGE FUND PERFORMANCE TRENDS & PREDICTIONS
• 03 HEDGE FUND ASSET FLOW TRENDS & PREDICTIONS
• 04 HEDGE FUND PORTFOLIO CONSTRUCTION & PLANS
• 05 HEDGE FUND STRATEGY ALLOCATION PLANS
• 06 HEDGE FUND FEES
• 07 SEPARATELY MANAGED ACCOUNTS
• 08 PORTABLE ALPHA & ACTIVE EXTENSION

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