Hedge funds grow at the fastest rate ever

This newsletter will be the last before we take a break for August. We’ll be back in September and would like to wish all our readers a lovely summer.

In today’s newsletter:

• Hedge funds grow at fastest rate in history

• Trump Media fast feed for president’s posts sparks Wall Street backlash

• Asian private credit fundraising sinks to 12-year low

Hedge funds grow at fastest rate in history

Assets managed by hedge funds rose by the largest amount ever last quarter due to the AI-driven boom in share prices and investors moving away from private equity and credit funds.

Last quarter, total assets under management grew by $409bn to $5.6tn, with investment performance accounting for much of that rise, according to specialist data provider HFR.

Hedge funds lost money in a volatile March following the outbreak of the Iran war. Since then, they have benefited from a powerful equity price rally led by chip stocks such as Samsung, AMD and SK Hynix.

“I think this is going to be a golden era for hedge funds after a long, long time,” said Shenan Dhanani, co-chief executive at Trium Capital, which manages $5.1bn in assets.

Hedge funds have also received strong investor demand, with the $134bn invested over the last three quarters being the largest inflow over a three-quarter period since 2007, the HFR data showed, writes Costas Mourselas.

This has partly been down to positive returns during a period where the private equity industry has struggled to return capital to investors. Hedge funds often allow redemptions within between one and six months, while private capital vehicles traditionally take between five and seven years to return capital.

“You have a dissatisfaction with some of the private investments, so people are slowly getting money back from PE and they are not necessarily going to put that back in,” said Patrick Ghali, co-founder of Sussex Partners, which advises large investors on hedge fund allocations.

Macro strategies, where hedge funds make bets on key economic indicators such as economic growth and inflation, are the most desirable strategy so far this year according to HFR inflow data.

Institutions such as big pension funds and endowments have looked to insulate their equity portfolios from market swings caused by geopolitical risks, including the potential fallout of the Iran war or a further escalation of the global trade war that US President Donald Trump started last year.

Allocators pulled more than $100bn from the global hedge fund industry in 2022 when many failed to protect their investors from a global crash in equity markets.

Trump Media fast-feed fee sparks backlash

Wall Street is protesting over a proposal by Trump’s social media company to charge for high-speed access to his posts, as industry executives balk at the fee and raise questions over potential legal jeopardy.

Nasdaq-listed Trump Media & Technology Group, which owns Trump’s social media platform Truth Social, last week announced a new data service that would provide “faster” access to posts from the top accounts on the website within milliseconds, write Costas Mourselas, Nikou Asgari, Amelia Pollard, Kaye Wiggins and George Steer. Multiple people familiar with the matter said that access to the service was being touted at a fee of $100,000 a month.

The new venture is the latest way the president has created moneymaking opportunities from his time in the White House. His vast business portfolio earned $2.2bn in 2025 from interests ranging from cryptocurrencies to Bibles, according to a financial disclosure last month.

Richard Painter, professor of corporate law at the University of Minnesota and former White House ethics adviser to President George W Bush, said the plan could pose legal risks for firms that subscribe to it.

“If I were the general counsel of any of these institutional investors I would say: ‘Don’t even touch this unless Truth Social will guarantee there will be no advance notice of any posts that contain information about the actions of the United States government,’” he said.

A White House spokesperson declined to comment, referring questions to Trump’s media group. A company spokesperson said: “Truth API offers customers the fastest way to ingest publicly available Truth Social data. Critics must have invented a new theory of ‘insider trading’ based on publicly available information.”

Trump’s Truth Social posts have long been seen by hedge funds and other heavyweight investors as crucial to swings in equity, currency, commodity and bond markets because policy is so unpredictable under the current administration.

While TMTG’s press release announcing the product doesn’t make direct reference to Trump’s posts, a pitch deck shared with potential clients and seen by the FT documented 10 market-moving posts by the US president.

These included Trump’s post on the “liberation day” tariffs last year which sent stocks down 12 per cent and another about hitting Iran “very hard” in June which sent oil soaring.

Asian private credit fundraising sinks to 12-year low

This year, Asian private credit funds have raised the lowest amount of capital in more than a decade, as many investors retreat from the market due to worries about high-profile corporate bankruptcies.

While several larger investors have indicated they are willing to commit to private credit funds despite the negative stories around the asset class, most are favouring large US managers over Asian competitors, writes Owen Walker.

Just five Asia-based private credit funds closed in the first half of this year, raising $1.2bn, according to data from PitchBook. That compared with 29 funds raising $9.5bn last year and 53 funds raising $20.2bn in 2022.

If funds close at the same rate in the second half, 2026 will be the quietest year for Asian private credit fundraising for at least 12 years.

The drop-off is a blow for the Asian market, which was expected to grow significantly in the coming years. It also highlights how investors still interested in private credit are favouring larger, more established fund managers amid rising concerns over the riskiness of the asset class, according to industry analysts.

While Asia’s private credit industry is much smaller and less mature than established sectors in the US and Europe, it has long been thought of as an area of huge potential.

As recently as November, the Alternative Investment Management Association predicted that Asian private credit market assets would swell by 46 per cent to $92bn between 2024 and 2027, growing at a faster rate than more developed regions. Much of the inflow was expected to come from wealthy individuals.

Sean Hung, an analyst at rating agency Moody’s, said he expected Asian investors to reduce their commitments to private credit over the next 18 months. 

“Macroeconomic uncertainty, geopolitical tensions and elevated interest rates [are weighing] on investor appetite for illiquid assets,” he said.

Nevertheless, large investors have committed billions of dollars to the asset class, seeking to profit from the exodus of retail clients.

This month, Singapore state investor Temasek announced plans to increase its exposure to private credit from 2 per cent to 5 per cent by 2031.

Renewable investing still has some energy left. Impact-focused infrastructure funds — many of which focus on renewable energy — received healthy demand in 2025. Both Brookfield Asset Management and Copenhagen Infrastructure Partners raised large funds.

The number of high earners who will be forced to reduce their pension contributions could increase by more than one-fifth to over 614,000 by 2032, according to an analysis from pension consultants Barnett Waddingham.

Investment firms are on track to launch a record number of exchange traded funds this year, with more than 1,000 already debuted, as they opt for a “spaghetti cannon” approach to try to find the latest hot stock market trends, according to data firm Morningstar.

Blackstone boss Jonathan Gray told the FT that the pace of redemptions at its flagship private credit fund had slowed. This follows a recent surge in customers seeking to withdraw their money this year.

Stocks of the world’s largest US private capital groups, such as KKR and Blackstone, have fallen sharply this year, as they missed out on surging initial public offering and deal activity that drove shares of Wall Street banks to record highs.

And finally

The first major European retrospective of James McNeill Whistler in 30 years is now at Tate Britain, bringing together his celebrated works alongside hidden masterpieces. The exhibition traces Whistler’s progress from precocious adolescent sketches in St Petersburg to enigmatic late-career self-portraits via a collection of portraits, prints and radical design.

Until September 27