CORRECTED-Investors look beyond US hedge funds for the first time since 2023, Barclays says

By Nell Mackenzie

LONDON, Feb 6 (Reuters) - Investor interest in U.S. hedge funds is waning for the first time since 2023, with talk of a "Sell America" trade simmering since U.S. President Donald Trump's sweeping Liberation Day levies in April.

Investors in the U.S. and Europe told Barclays that this year they intend to increase exposure to U.S.-based hedge funds by 5% less than they did in 2025, while also adding money to hedge fund managers in Asia and Europe, according to a survey of 342 investors managing a total of $7.8 trillion in assets.

Interest in Asia-Pacific-based hedge funds has more than doubled since the lows of 2024, Barclays' report said.

U.S. interest in European-based hedge funds more than doubled, Barclays said. In the survey that took place over November and December, investors in Europe told the bank that they were 8% more willing to put money into European managers than last year.

Interest in hedge fund managers based in Asia grew around 10%.

Hedge fund fees remain historically high, survey respondents told Barclays. Average management and performance fees peaked in 2025 for traditional hedge fund products, while the kind that pass through costs have decreased.

Since 2023, investors' share of gross returns has risen from around 47% to 56%, the bank said. Investors have also seen overall hedge fund returns grow by around 5% this year, it added.

The biggest hedge fund multi-managers continue to grow, Barclays' data showed.

Multi-manager assets under management have grown at rate of around 17% annually since 2017 to around $435 billion last year, the bank said.

They were not investors' top strategy pick, however. Hedge funds that base investment decisions on macroeconomic factors and those that trade stocks systematically garnered the highest levels of net allocators in 2025, Barclays said.

Overall, the hedge fund industry grew by just over a fifth between 2023 and 2025, its largest two-year jump since that between 2011 and 2013, the data showed.

Equity Market Neutral is the most favoured strategy for 2026, followed by Quant Multi-Strategy, which has been the most sought-after since 2020, according to the survey results.