The hedge fund industry in the U.S. and Europe is projected to expand steadily, supported by institutional inflows, alternative investment demand, and technology-driven strategies. By 2025, global hedge fund assets under management (AUM) are expected to reach $5.3 trillion, growing to $6.5 trillion by 2030, representing a CAGR of 4.2%. The U.S. will remain dominant, accounting for ~70% of global AUM, while European hedge funds grow their share to ~20%, fueled by sovereign wealth funds and pension allocations.

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Strategy shifts are evident: quantitative and AI-driven funds are projected to grow assets by 8–10% annually, while ESG-focused hedge funds are on track to represent 15% of European AUM by 2030. Fee compression is driving managers to adopt performance-linked models, with average management fees declining from 1.4% in 2025 to 1.1% by 2030, while performance fees hover near 17–18%. Hedge funds integrating digital assets and private credit strategies are reporting 20–25% higher inflows compared to traditional equity long/short strategies.

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The hedge fund sector is no longer operating in silo it is a diversified, tech-enabled industry, adapting to investor demands, regulatory pressures, and global market volatility to capture sustainable growth in the U.S. and EU.

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 5 Key Quantitative Takeaways (2025–2030, US & EU):

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• AUM growth: $5.3T → $6.5T (CAGR 4.2%)

• U.S. share of global AUM: ~70%

• European share of global AUM: ~20%

• Decline in average management fees: 1.4% → 1.1%

• ESG-focused hedge funds: 15% of EU AUM by 2030

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Download the full report to explore hedge fund AUM growth, strategy shifts, fee models, and regional investment trends across U.S. and European markets.

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