Innovative trends continue to emerge in the fund sector as we gear towards 2025, potentially transforming investment strategies and the asset management landscape. These developments reflect the shift in investor preferences and the surging popularity of alternative investments in the modern financial scene.  

In this article, we list some of the trends that will reshape the funds sector in 2025.  

1. Integration of Alternative Assets  

Alternative investments offer investors an exciting opportunity to increase portfolio diversification and boost returns. Target date funds (TDFs), which provide unique return profiles and improve inflation protection, are redefining their strategies by integrating alternatives like real estate and private equity.   

2. Development of Private Equity and Hedge Funds 

Investors seeking alternatives with less correlation to traditional equities are increasingly turning to private equity. In the meantime, hedge funds are becoming more popular because of their ability to capitalise from market volatility and provide a range of investment options that can lower risk and boost returns. Due to a surge of investors keen to benefit from the opportunities available in private markets, these sectors are poised for exciting growth.  

According to Bolder Group’s Global Head of Funds, Neco Dusseldorp, there will be an increased interest from Sovereign wealth funds for private equity. Moreover, due to the lack of mergers and acquisitions (M&A) activity, the use of continuation vehicles keeps rising.  

Dusseldorp adds that hedge funds AUM was up 11.5 per cent in the last 12 months, as stated in the Preqin 2025 Global Report: Hedge Funds, but long-term outflows point to investors cooling on the asset class. However, some strategies are still attracting capital.  

The expert also mentions that one of the challenges for hedge fund managers to adapt their investment strategies to meet the growing demand for socially and sustainably responsible investments is dealing with US equity, given the current market values and the incoming presidency. He further explains that the number of funds in the market increased, and the number of new managers is at an all-time low, which suggests consolidation. Additionally, the cost of doing business for fund managers is also growing because of the continued increase in regulatory burdens, such as the EU Alternative Investment Fund Managers Directive (AIFMD)—known as “AIFMD II,” which came into force on 15 April 2024 and will apply from 16 April 2026.  

3. Thematic Investing 

Rapid growth is evident in thematic investing, particularly in the fields of technology and renewable energy. Opportunities that align with significant long-term trends, such as sustainability and advancements in technology, are attracting a growing number of investors who are planning for future success. Concentrating on thematic investing while diversifying their portfolios allows investors to strategically target specific growth sectors.  

4. Impact Investing  

Impact investing is experiencing an immense upswing as more investors look for positive environmental and social outcomes in addition to financial gains. Investors who are socially concerned and seek ways to align their portfolios with their values while still promoting growth and changing the world are drawn to this approach.   

5. Increased Importance of ESG Investing  

The importance of environmental, social and governance (ESG) considerations in investment strategies is quickly growing across various asset classes. As a result of a significant shift toward sustainable investment that prioritises accountability and long-term effect, investors are actively incorporating ESG factors into their decision-making processes. This evolution not only aligns financial goals with ethical considerations but also positions investors to contribute to a more sustainable future.   

In our latest ESG 2025 Outlook blog, Bolder Group’s ESG Specialist, Ana Prada, highlighted the directives and legislative developments regarding ESG aspects, including the Corporate Sustainability Due Diligence Directive (CSDDD), which requires full compliance to manage potential risks and address the rising expectations of investors and consumers.  

6. Focus on Artificial Intelligence (AI)  

Artificial Intelligence (AI) is transforming fund managers’ data analysis and investment decisions. These technological advancements provide quick access to relevant information and help identify potential investments. Furthermore, with the proper and effective use of AI, companies may streamline their operations and secure a significant competitive advantage in portfolio management.  

Dusseldorp mentions that AI offers investment opportunities and will bring quantitative trading to new levels of sophistication since data quality has never been more critical. Meanwhile, Bolder Group’s Global Head of Governance, David Payne, explained in our recent tech and governance blog that AI can also help improve decision-making, manage risks and streamline board processes.    

Bolder fund services

These trends are anticipated to reshape the funds sector in 2025, requiring fund managers and investors and other key players to refine their business strategies so they can keep up with the changing environment and maximise expansion opportunities. 

Bolder Group is a leading global fund solutions provider committed to delivering exceptional client-focused services. Our team of experts can help you navigate the evolving trends in the funds sector, enabling you to thrive in a competitive landscape and seize new growth opportunities. With our comprehensive solutions, you can focus on your core business while we handle the complexities of fund administration, accounting, investor relations, governance, compliance and more.  

For more information about our fund services, please contact our team today.  

Bolder Group does not provide financial, tax or legal advice and the information contained herein is meant for general information purposes only. We strongly recommend that before acting on any of the information contained herein, readers should consult with their professional advisers. The Bolder Group accepts no liability for any errors or omissions in the information, or the consequences resulting from any action taken by a reader based on the information provided herein.

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