Most Nordic institutional investors have exposure to alternative asset classes, including private equity, private debt, and hedge funds. According to a survey by RBC BlueBay of 450 asset owners globally – including 50 from the Nordics – approximately 58 percent of Nordic respondents are invested in hedge funds. They also stand out as the most eager among European investors to increase their hedge fund allocations, with 69 percent planning to do so.
“Looking back, we’ve certainly seen a growth in Nordic investor appetite for alternatives, with allocations rising from approximately 5-10 percent to 20-25 percent of overall portfolios,” says Annica Woronowicz, Head of Nordics at RBC BlueBay. “While domestic real estate and private equity strategies have historically proved most popular, we have in recent years seen a greater willingness amongst investors to consider other sub-asset classes within the universe.”
With average allocations of 7.1 percent – compared to 5.9 percent globally – Nordic investors maintain a relatively high exposure to hedge funds. They are also twice as likely as their global peers (28 percent versus 13 percent) to report allocations exceeding 10 percent. This strong interest is expected to continue, as Nordic investors are the most enthusiastic in Europe about increasing their hedge fund exposure, with 69 percent planning to do so versus 61 percent across Europe.
“In the case of hedge funds specifically, this has been an unloved and under-owned area for the region for some time, mainly due to underperformance.”
“In the case of hedge funds specifically, this has been an unloved and under-owned area for the region for some time, mainly due to underperformance. However, we now see higher interest rates and greater levels of volatility as positive forces driving renewed investor interest,” notes Woronowicz. The survey also found that only 3 percent of Nordic investors expect to reduce their hedge fund exposure, half the proportion of their European counterparts at 6 percent.
The resurgence of market volatility so far in 2025 – fueled by geopolitical tensions and trade disputes – has prompted many institutional investors in the region to adopt a “wait and see” approach, according to Woronowicz. “There’s growing acceptance that the current environment may require a new approach to portfolio construction, highlighting the importance of diversification and active management.”
The global survey from RBC BlueBay can be accessed here.
