Key Takeaways
- • Marex and Hedgeweek's annual investor sentiment study finds 54% of allocators plan to increase hedge fund exposure in 2025, more than double last year's figure, while only 3% intend to reduce allocations.
- • Quant and systematic strategies show the strongest demand, with 75% of investors planning to increase exposure, and 55% of allocators seek more macro strategy exposure.
- • Private credit remains a focus, with 65% of allocators planning to increase exposure, though manager selection is critical.
- • Liquidity constraints in private equity and private credit, mature portfolios and locked capital structures are slowing actual reallocations to hedge funds.
- • Multi-manager platforms and SMAs are gaining traction as allocators seek customization, transparency and access to emerging talent.
Summary
Allocator sentiment toward hedge funds is strengthening in 2025, according to a study conducted by Marex in partnership with Hedgeweek. The annual report found that 54% of investors plan to increase hedge fund exposure, more than double last year's figure, while only 3% intend to reduce allocations. Respondents cite higher rates, market volatility and the role of hedge funds as diversifiers relative to traditional 60/40 portfolios as drivers of the outlook.
The study cautions that enthusiasm does not guarantee flows. Mature portfolios and liquidity constraints, particularly in private equity and private credit, continue to slow reallocations, with many investors tied up in locked capital structures. Allocations are expected to rebalance selectively toward hedge funds, with investors targeting specific strategies aligned with portfolio objectives rather than broad-based increases.
Quant and systematic strategies emerged as a standout trend, with 75% of investors planning to increase exposure. Demand for macro strategies also remains strong, with 55% of allocators seeking more exposure to navigate geopolitical risk and economic uncertainty. Investors are increasingly combining systematic and discretionary styles, and these strategies are increasingly embedded within multi-manager platforms that offer stability and risk control.
Multi-manager platforms have strengthened their position among institutional allocators, delivering consistent performance over the last five years. Competition for emerging talent has intensified, and separately managed accounts (SMAs) are gaining traction as investors seek customization, transparency and control. Alignment on fees and liquidity terms remains a central focus. Private credit also remains topical, with 65% of allocators planning increases, though the report stresses that manager selection, experience across credit cycles and the ability to navigate high-rate environments are critical.
Marex, which positions itself as a capital introduction provider, said it plays a key role in facilitating these allocations. The report and accompanying Hedgeweek webinar frame 2025 as a year of strong investor confidence in which capital deployment remains targeted and nuanced.
The study cautions that enthusiasm does not guarantee flows. Mature portfolios and liquidity constraints, particularly in private equity and private credit, continue to slow reallocations, with many investors tied up in locked capital structures. Allocations are expected to rebalance selectively toward hedge funds, with investors targeting specific strategies aligned with portfolio objectives rather than broad-based increases.
Quant and systematic strategies emerged as a standout trend, with 75% of investors planning to increase exposure. Demand for macro strategies also remains strong, with 55% of allocators seeking more exposure to navigate geopolitical risk and economic uncertainty. Investors are increasingly combining systematic and discretionary styles, and these strategies are increasingly embedded within multi-manager platforms that offer stability and risk control.
Multi-manager platforms have strengthened their position among institutional allocators, delivering consistent performance over the last five years. Competition for emerging talent has intensified, and separately managed accounts (SMAs) are gaining traction as investors seek customization, transparency and control. Alignment on fees and liquidity terms remains a central focus. Private credit also remains topical, with 65% of allocators planning increases, though the report stresses that manager selection, experience across credit cycles and the ability to navigate high-rate environments are critical.
Marex, which positions itself as a capital introduction provider, said it plays a key role in facilitating these allocations. The report and accompanying Hedgeweek webinar frame 2025 as a year of strong investor confidence in which capital deployment remains targeted and nuanced.
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