August 2026

So far, 2026 has been another positive year for hedge fund performance, providing a reassuring backdrop for investors. The bigger story, however, has been the pace and breadth of change across the alternatives industry.

While deal making and historical returns remain the top performance metrics, leading managers are increasingly prioritizing operational excellence, and for good reason. Operational missteps can trigger a range of consequences including regulatory fines and damaged investor relationships.

As we begin a new year, it would not be a far stretch to assume many who looked to the crypto markets in 2025 were speculating their digital assets of choice would ride the presumption of volatility in an ever-upward price movement.

As we look back on 2025, one of the most defining developments in the UAE has been the extraordinary expansion of Dubai International Financial Centre (DIFC) as the preferred destination for the world's hedge fund community.

The past decade has laid the groundwork for a structural transformation in private markets. What was once the exclusive domain of institutional allocators and ultra-high-net-worth investors is steadily opening to a broader investor base.

Moderating the iConnections Global Alts Asia session on global allocator trends at the end of last year offered a timely window into how investment teams are navigating one of the most unpredictable market environments in years.

2026 is shaping up to be a strong year for hedge funds as investors continue to reassess allocations in a more volatile and uncertain market. Persistent geopolitical risk, uneven economic growth and higher for longer interest rates have reinforced the role of hedge funds as risk-mitigating, uncorrelated return generators.

Global wealth has reached unprecedented levels. According to the UBS Global Wealth Report 2024, household wealth now exceeds USD 500 trillion globally and is expected to surpass USD 600 trillion by the end of the decade.

For decades, ultra-high net worth individuals and family offices have relied on private banks and wealth managers for their capital markets activity. These relationships remain central to how families think about advice, governance and long-term stewardship of wealth.

Private wealth and investment funds are two of the mainstays of Jersey's financial services sector. In recent years, we have seen some convergence between the two sectors with two distinct themes of Ultra-High-Net-Worth Individuals (UHNWI) and family offices.

Crypto's early private markets were defined by access. Capital flowed to those closest to networks, protocols, and information asymmetries. Innovation outpaced structure, and participation was often driven by opportunity rather than underwriting discipline.

If a finance team mistakenly wires $1m to the wrong bank account, that money is not gone. There are established remedies, counterparty and legal frameworks designed to unwind the error. In a decentralised blockchain system, that safety net does not exist.

Private markets have long been the lifeblood of growth-stage and mid-size businesses looking to scale. Private equity alone saw $2.6 trillion in deal value globally in 2025, up by almost a fifth on the year before.

"Crypto" has historically been shorthand for volatility and speculation, or worse. Institutional participants have previously sought to separate the technology from the emerging asset class; i.e., "blockchain not crypto".

Bitcoin ETF volumes have climbed to roughly 50% of BTC spot volumes in recent weeks, a sign of how quickly the market's structure has shifted. Crypto trading, once dominated by spot exchanges, now runs through instruments long familiar to traditional finance.

Whilst historically both small and overlooked, European credit hedge funds have grown in recent years to occupy an important niche in diversified portfolio allocations.

Liquidity conditions in private markets remain a central concern for allocators today, prompting renewed questions about the value of private allocations relative to public equivalents.

Fragmentation is a key feature of the current investment landscape, with geopolitical tensions and divergent policies creating a more complex and volatile environment. Capital flows and financing conditions are increasingly region and market-specific.

For asset managers of private capital in a fragmented world, trust is critical. We trust that ownership is clearly defined, transactions will settle as agreed, records are accurate, and rules are enforced consistently.

Japanese companies faced major headwind in the decades after the stock market crash in 1989, commonly referred to as the "Lost Decades." The economy faced deflation, negative GDP growth, and a shrinking and aging population.

Asia is once again commanding the attention of global allocators, driven by a powerful combination of diversification needs, attractive valuations and compelling structural growth themes.

For years, Asia sat in many global alternatives portfolios as a diversification story, or a market to watch rather than meaningfully scale. That is becoming harder to justify.

China's quantitative investment landscape is capturing global attention after a remarkable year. According to PaiPaiWang and With Intelligence, quant funds in the PRC have posted average returns exceeding 30%, more than double the performance of their global peers.

The debate surrounding ESG is increasingly fatigued. As allocators grapple with shifting regulatory frameworks and the inherent limitations of using ESG merely as a defensive, backward-looking risk overlay, the focus is decisively shifting toward impact investing.

The most important question in impact investing is not whether capital reaches the underserved - it does. The question is what actually happens next.

Developing economies need between $1.1 trillion and $1.8 trillion a year in climate finance over the next decade. But while capital is abundant, it is not flowing at the scale, the price, or at risk levels that work.

When Microsoft procures energy or builds a data centre, it does not pay for intentions. It pays for performance. Carbon removals are increasingly subject to the same standard.

As fiduciaries of our client's capital – clients who have typically not been exposed to private market investments to date – it is beholden on us to answer two key questions: Why should we begin investing in private markets today (if at all)?

The secondaries market has grown up around a simple problem: investors who want out, and capital that wants in. LP stake sales, GP-led restructurings, tender offers on private company shares: all well-established routes.

All eyes are on the trophy assets. Or should they be? The secondaries market has moved into a new phase of scale. Global volume hit USD 226bn in 2025, up more than 40% on the year.

Private markets have reached a turning point. Companies are staying private longer, using private capital to fund growth, acquisitions, and global expansion without the costs and obligations associated with public markets.