Global Market | Europe's wealthy return to hedge funds offering daily liquidity

Europe's affluent investors are shifting back to hedge fund-like products offering daily liquidity, attracted by the standout returns of these liquid alternative strategies. As central banks in Europe lower interest rates, these investment vehicles, known as UCITS (Undertakings for Collective Investment in Transferable Securities), have seen significant growth. According to Kepler Partners, assets in alternative UCITS surged by 22% to $287 billion in 2025, marking the longest period of growth in four years. This resurgence comes as investors pivot from fixed-income assets, which had previously dominated during a phase of rising interest rates. Industry experts note that since late 2024, there has been a marked increase in capital inflows into these liquid alternative strategies. The Kepler Absolute Hedge Global Index recorded an impressive 7% average return for UCITS funds in 2025, surpassing the 3% return of investment-grade corporate debt. The UCITS framework, established by a 1985 EU directive, allows for more flexible withdrawal options compared to traditional hedge funds, which often lock in capital for extended periods. This shift highlights a growing preference among European investors for more accessible and potentially lucrative investment opportunities in the wake of changing economic conditions.