Global hedge fund assets grew by a record for any quarter in the second quarter of 2026 when they rose US$409 billion to US$5.6 trillion. (File pic)HONG KONG: Hedge funds are drawing in new fans and a rush of capital from Asia, as pensions, family offices and other investors look to alternative managers to help them navigate volatile debt markets and wobbly equities.

Private bankers and asset allocators told Reuters that Asian investors are increasingly seeking asset diversification compared to their usual allocations to equities and bonds.

The trend is the latest pressure point for traditional long-only managers, whose performances have come under scrutiny due to volatility in markets. It also raises questions on investors' default risk-management strategy of the 60/40 allocation to stocks and fixed income.