Spotlight on Toby Goodworth, Managing Director, Head of Liquid Markets, bfinance
Global Thought Leader Spotlight
Toby Goodworth, Managing Director, Head of Liquid Markets, bfinance
In my role as the Head of Liquid Markets at bfinance I am responsible for overseeing all investment research activity within the firm’s Liquid Markets division, spanning global equity, fixed income and diversifying strategies research.
For the last 13 years at bfinance I have focused specifically on liquid alternative assets, supporting our clients in allocating to hedge funds and other liquid, non-traditional strategies including FX overlays and tail risk overlays.
I am also a member of the firm’s Senior Management Team, helping ensure bfinance stays at the forefront of providing our clients across the globe with tailored, independent, investment advisory and implementation support across all asset classes. To date we have advised clients in 47 countries on allocations totalling A$470+ billion.
Global hedge fund allocations on the rise
Hedge funds are experiencing elevated appetite from investors globally as a result of a currently compelling opportunity set and the potential for meaningful portfolio impact, driven by current market conditions.
In the near term, strong hedge fund performance is coinciding with rising concerns around traditional asset classes, creating a powerful combination of “pull” and “push” factors.
Stretched equity valuations, tight credit markets and ongoing debate over the diversification reliability of bonds are prompting investors to reassess portfolio construction, with hedge funds increasingly viewed as a means to diversify both equity and fixed income exposures as well as generating significant alpha.
At the same time, elevated allocations to illiquid private markets are sharpening the focus on liquid alternatives, further supporting demand.
This environment has translated into sustained allocator activity, with hedge fund searches remaining at high levels through 2025 for a third consecutive year, with activity looking set to remain strong in 2026.
Notably, new and refreshed allocators, particularly wealth managers, are implementing or scaling liquid alternatives programmes, often with materially higher target allocations than in the past.
Across hedge fund strategies, market independent approaches continue to attract the greatest interest. Improved performance has driven a resurgence in CTAs, while event driven strategies are positioning for potential M&A tailwinds.
Further out, these dynamics may result in hedge funds playing a more structural rather than tactical role within portfolios if current challenges in traditional markets persist.
However, sustained inflows also raise risks around crowding, capacity constraints and greater performance dispersion in several hedge fund strategies, increasing the importance of manager selection and portfolio construction.
Implications for sophisticated investors
In the near term, we expect hedge funds to be increasingly treated as a core portfolio diversifier rather than a marginal or tactical allocation, particularly as confidence in traditional equity-bond diversification has weakened and investors place great uncertainty around equity beta-heavy exposures.
This places greater emphasis on clearly defining the role hedge funds are expected to play within investor portfolios, whether as diversifiers of equity risk, stabilisers of fixed income exposure, or sources of differentiated return streams.
Within the Private Wealth space specifically, those without thoughtfully constructed client access to hedge funds and other liquid alternatives may be structurally disadvantaged, both in terms of client portfolio risk and return expectations, in the current volatile environment. As a result, we have seen a concerted push towards more deliberate portfolio construction which includes liquid alternative allocations either for the first time, or with renewed emphasis.
We see no signs of the current elevated activity levels around hedge fund allocations dampening in the near term.
Toby will be presenting at Global Investment Institute’s upcoming Private Wealth Investment Leaders Forum, taking place on Wednesday, 13 May 2026 in Melbourne CBD, Victoria. To register your interest in attending, click here or for more information email zlatan@globalii.com.au.
Toby Goodworth, Managing Director, Head of Liquid Markets, bfinance
Toby Goodworth is Head of Liquid Markets at bfinance and a member of the firm's Senior Management Team.
Previously, he was Head of Risk Management and a member of the Investment Committee at Key Asset Management, one of Europe's oldest fund of hedge funds. He has 23 years of industry experience, including over 20 years as an allocator within the hedge fund industry.
Toby holds a PhD in Physics from University College London and a First Class honours degree in Physics, also from UCL.
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