Finance
US, Asian investors turn to European and MidEast hedge funds, BofA survey shows
Published by Global Banking and Finance Review
Posted on September 25, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 25, 2025
2 min readLast updated: January 21, 2026
US and Asian investors are moving funds to European and Middle Eastern hedge funds, as per a BofA survey. European allocations exceeded expectations.
By Nell Mackenzie
LONDON (Reuters) -Wealthy investors in the United States and Asia have cancelled plans to put money into U.S. hedge funds this year, while increasing their exposure to Europe and the Middle East, according to a Bank of America survey seen by Reuters on Thursday.
Half of the allocators who told Bank of America last year they would invest in U.S. hedge funds have now ditched these plans, according to the survey.
The report, which canvassed 263 respondents, representing around $840 billion of industry cash, showed European allocations exceeded expectations by 8%, based on the bank's data, which compared surveys done during the fourth quarter of last year to its most recent investor survey carried out this August and September.
U.S. and Asian investors led the move into hedge funds based in Europe and the Middle East, where several global hedge funds have set up shop in Abu Dhabi and Dubai in recent years.
The biggest of these, which manage over $10 billion, favoured deals with hedge funds called separately managed accounts - special investment vehicles that are created for a single allocator.
Firms like pension funds, sovereign wealth funds and family offices have poured $37 billion into hedge funds so far this year, the most new money the industry has seen since at least 2016, said BofA.
While some hedge funds will return an investor's money in a day, some will lock up money for as long as five years.
In public markets, money has more recently returned to U.S. equity funds, where weekly flows tracked by EPFR hit a year-to-date high of almost $58 billion last week.
(Reporting by Nell Mackenzie; Editing by Amanda Cooper and Kirsten Donovan)
The survey indicated that half of the allocators who planned to invest in US hedge funds have now abandoned those plans, shifting their focus to European and Middle Eastern hedge funds.
Firms such as pension funds, sovereign wealth funds, and family offices have invested $37 billion into hedge funds so far this year, marking the highest influx of new money since at least 2016.
Investors are increasingly favoring hedge funds based in Europe and the Middle East, particularly those that offer separately managed accounts tailored for individual allocators.
Recently, there has been a resurgence of funds flowing back into US equity funds, with weekly flows reaching a year-to-date high of nearly $58 billion.
Some hedge funds offer quick returns, allowing investors to withdraw their money in as little as one day, while others may require funds to be locked up for as long as five years.
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