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The hedge fund industry witnessed a major geographic reallocation this week as wealthy US and Asian investors cancelled plans to invest in American hedge funds, redirecting capital toward European and Middle Eastern strategies. According to a Bank of America survey released Thursday, half of the allocators who had planned US hedge fund investments last year have now abandoned these plans, marking a significant shift in global capital flows. Meanwhile, risk parity strategies popularized by Ray Dalio staged an impressive comeback, with returns reaching up to 19% year-to-date. AQR Capital Management's multi-asset fund gained 15% while Columbia Threadneedle's version returned approximately 12%, signaling renewed confidence in quantitative approaches after years of underperformance. The shift comes as macro and equity strategies drive overall hedge fund growth, with 81% of funds generating positive returns in August.

Private Credit Market Shows Clear Signs of Rising Stress The USD 1.7 trillion private credit market is facing elevated stress levels with default rates rising above public credit markets and more borrowers deferring cash interest payments. Bank of America reported that approximately 30% of private credit loans with PIK (payment-in-kind) components are maturing within two years, creating what analysts describe as a steep maturity wall. Despite these challenges, Blackstone, Apollo Global Management and Golub Capital are selling collateralized loan obligations backed by private credit at the fastest pace on record. Star Mountain Capital is planning to sell bonds via a collateralized fund obligation likely to raise less than USD 500 million. Sculptor Capital Management announced on September 22 the final closing of its Tactical Credit Fund, drawing nearly USD 900 million from global institutional investors. The Australia......................

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