Desmond Lawlor – Senior Vice President – Capital Introduction (London)
Liquidity and performance continue to drive momentum toward hedge funds, something we have observed in our conversations with allocators across Europe, the Middle East, and Asia.
Globally, hedge fund investments reached their highest level through the end of Q3 2025, with allocators investing $34bn in the quarter, the largest net inflows since 2007, according to HFR’s most recent report. That brings the YTD net inflows to $71bn.
Here in Europe, the usual suspects remain at the top of the shopping list: long/short equity and low-net or market neutral strategies where managers with pedigree and a strong track record still carry more appeal than their longer-biased counterparts. This is in part due to allocators focusing on expected performance over a three-year period rather than higher-beta strategies where volatility and drawdowns can be much bigger over the same time frame.
In terms of geographical focus, the U.S. has, for the first time, experienced some indifference, whether this is due to concerns around over-exposure or due to investors seeing opportunities in Europe as a whole for the first time in almost 10 years. This has been a common theme in our recent conversations with investors here in Europe, who have historically been more bullish about the U.S., but have taken note as European equities have outperformed the year.
China and Japan remain the staples of the Asian investor landscape, with Japanese equities drawing increased attention from European allocators seeking experienced long/short managers in the region. Sweeping reforms in the management of companies and a supportive government are providing strong tailwinds. China is slowly returning to the fray with investors in Europe and Asia alike, as managers with exposure to the region post stellar numbers across 2025, catching the eye of those with higher risk appetites.
Outside of equities, we see continued interest from investors both in Europe and Asia for commodity-trading strategies. As many investors struggle to get sufficient volatility into their portfolios, taking standalone commodity strategies across metals, carbon credits, and power has been noticeable with our family office and larger institutional investors expressing this via managed accounts.
Looking elsewhere: non-region-specific global emerging markets macro and debt strategies have seen continued interest, particularly with our Asian-based allocators. The dismal run for trend-following quant strategies had a temporary reprieve, but, at the time of writing, they look to have already been given back so this out of favor trend will likely continue.
The investor environment across Europe and Asia remains in a good place as we head into year end, and it is our consensus this will continue into 2026.
StoneX TV content is created, produced, and distributed solely by StoneX Media Ltd (“StoneX TV”) and is provided for informational and educational purposes only.
StoneX TV does not provide investment, financial, legal, or tax advice and does not make any recommendation or endorsement of any investment strategy, transaction, or financial instrument. Nothing in this content constitutes, or should be construed as, investment advice or a recommendation to buy, sell, or hold any financial instrument, including securities, futures, derivatives, digital assets, foreign exchange products, or CFDs.
This content does not constitute an offer, invitation, or solicitation to engage in any investment activity.
The information presented is general in nature and is not tailored to the financial situation, investment objectives, or risk tolerance of any specific person. You should not rely on this content as a substitute for independent professional advice.
Investing and trading in financial instruments involves significant risk of loss and is not suitable for all investors. Past performance is not indicative of future results.
Any views or opinions expressed are those of the presenter at the time of publication and are subject to change without notice. Such views may not necessarily reflect those of StoneX Media Ltd or its affiliates. StoneX Media Ltd and its affiliates, including StoneX Group Inc., may from time to time have positions in, or engage in transactions involving, the financial instruments referenced.
This content may include general market commentary and opinion. It does not constitute independent investment research and has not been prepared in accordance with legal requirements designed to promote the independence of investment research.
StoneX Media Ltd is not authorised or regulated to provide investment services and does not act in a fiduciary capacity.
StoneX Media Ltd is incorporated in Ireland and operates in accordance with applicable Irish law. It is a wholly owned subsidiary of StoneX Group Inc. and is a separate legal entity from other subsidiaries within the StoneX Group, which may be regulated in various jurisdictions. StoneX Media Ltd does not act on behalf of, or provide services for, any regulated affiliate.
This content is not directed at, and may not be distributed to, any person in any jurisdiction where such distribution would be contrary to local laws or regulations.
Supporting documentation for any claims, comparisons, statistics, or technical data may be made available upon reasonable request, where applicable.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
After another interesting start in the equity markets to the calendar year, hedge funds remain in focus for many institutional investors.
2026 is off to quite an interesting start with all that is going on in geopolitics and world energy and financial markets. When there is an increase in uncertainty, successful long-term investors stay focused on their long-term strategy but also take advantage of rebalancing and new investment opportunities that may present themselves.
For now, the U.S. dollar remains the anchor of the global financial system... but its shine is dimming. Each budget standoff adds to the erosion of confidence, leaving policymakers and investors alike to ponder the long-term implications.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve; our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
