Investors are planning to scale back their stakes in U.S.-based hedge funds for the first time since 2023, according to a Barclays survey that collected views from 342 investors overseeing a combined $7.8 trillion in assets. The move comes as chatter about a "Sell America" trade has persisted following the introduction of sweeping Liberation Day levies by U.S. President Donald Trump in April.
Survey respondents in both the U.S. and Europe reported intentions to reduce exposure to U.S. hedge funds by roughly 5%, reallocating part of that capital to managers located in Asia and Europe. Barclays noted that interest in Asia-Pacific-based hedge funds has more than doubled from the lows of 2024, while U.S. interest in European-based hedge funds more than doubled over the same interval.
Within the survey period, conducted over November and December, European investors indicated they were about 8% more willing to place money with European managers than they had been a year earlier. Interest in managers based in Asia increased by roughly 10%, the bank reported.
Respondents also told Barclays that hedge funds remain relatively expensive. For traditional hedge fund products, average management and performance fees peaked in 2025, while fee levels for products that pass through costs declined. Barclays said that since 2023 the investors' share of gross returns has risen from around 47% to 56%.
The survey found that overall hedge fund returns have risen by about 5% this year. At the industry level, the largest multi-managers continue to dominate. Barclays' data showed that multi-manager assets under management have expanded at a steady annual rate of 17% since 2017, reaching roughly $435 billion last year.
Despite the growth in multi-manager AUM, they were not the top strategy choice among investors. Barclays reported that hedge funds driven by macroeconomic decision-making and systematic equity trading attracted the highest levels of net allocators in 2025.
Across the industry, hedge fund assets grew by a little more than one-fifth between 2023 and 2025, representing the largest two-year increase since the 2011-2013 period, according to the bank's figures. Looking ahead to 2026, Equity Market Neutral emerged as the most favoured strategy, followed by Quant Multi-Strategy, which Barclays said has been the most sought-after approach since 2020.
Methodology note: The findings cited above come from a Barclays survey of 342 investors conducted during November and December, covering managers that collectively oversee $7.8 trillion in assets.