For the first time since 2023, investors are planning to increase their hedge fund exposure in Europe and Asia rather than the United States, according to a BNP Paribas survey shared with clients on Thursday. Wealthy financiers are diversifying away from the U.S. as policy uncertainty and tariffs weigh on American markets.
Europe is emerging as a key winner. Strong fiscal stimulus measures in Germany and improved long-term growth prospects have attracted fresh capital. BNP Paribas found that European hedge funds received more inflows than any other region in the first half of 2025. About 37% of investors added funds to Europe during that period, and another 33% said they plan to allocate more in the second half of the year.
By comparison, U.S. and Asia-based hedge funds together captured 47% of inflows, leaving Europe with the remaining share. Around a third of investors said they intend to increase hedge fund allocations in Europe and the Asia-Pacific, while just 14% plan to invest more in North American hedge funds.
The BNP Paribas Hedge Fund Outlook covered 140 financiers across 16 countries, representing $960 billion in hedge fund assets. Credit hedge funds saw the highest inflows at $4.5 billion, followed by multi-manager funds and equity-focused strategies.
Global equity funds outside the U.S. also reported their largest inflows in over four years in July, according to Reuters. Smaller and mid-sized hedge funds, managing under $10 billion, attracted the bulk of new investor money.
Despite this shift, the majority of hedge fund investors are still based in the United States. The survey showed 73% of respondents were located there, compared to 32% in Europe and 23% in Asia, excluding Japan.
