Quentin Werlé is CFO & Head of Portfolio at 6 Monks.
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Given how many headlines these days are filled with talk of tariffs, trade wars, and political tensions, it’s not surprising that investors are becoming uneasy. For fund managers, these developments add a fresh layer of complexity. Shifting trade policies and geopolitical uncertainty are actively influencing capital flows and risk management strategies in what is already a fast-moving market.
But where do alternative funds fit in this picture? That’s what I wish to explore in this article. How much tariffs really matter for Alternative Investment Fund Managers, and what they can do to maintain resilience and better meet the changing investor interests against this backdrop.
How tariffs are shaping the playing field
At first glance, the U.S. tariffs certainly look like a big storm cloud over the global economy. They directly affect companies that rely on cross-border trade, raising costs and squeezing margins. Unsurprisingly, equity markets often react with sharp, short-term volatility.
But when it comes to alternative funds, the tariffs don’t hit this industry directly. They apply to goods, which means that manufacturers, exporters, and importers are the ones most affected. Only a few underlying investments of the Funds may be impacted if they are invested in such companies. But this doesn’t have a direct impact on the management fees or investor remuneration that underpin the mechanics of fund management business structures.
For the sake of comparison, let’s look at the withholding tax which applies to cross-border investment income, such as dividends or interest payments. If those rates were raised, it would come as a shock. Investors in funds would immediately see lower returns, and managers would face pressure on their performance, resulting in a major direct hit to the industry’s economics.
Tariffs, on the other hand, only seep into the fund world indirectly — by lowering company valuations in sectors that depend on global trade. So while they may shake specific portfolio choices, they don’t change the basic economics of how funds operate.
The resilience of alternative funds also comes from their very design. Unlike traditional funds that often move in step with major stock indexes, alternative strategies generally have low correlation with stock markets. This makes them less vulnerable to shocks caused by tariff announcements.
Moreover, diversification adds yet another layer of protection. A well-structured Alternative Investment Fund might hold private equity, infrastructure, real estate, and even a slice of crypto-assets. And while tariffs may have some effect on the private equity, particularly when U.S. markets are involved, the broader portfolio would be largely insulated from those shocks.
Where investors are looking in uncertain times
Of course, we should recognize that tariffs aren’t the only thing unsettling investors right now. High levels of government debt, geopolitical flare-ups, and shifting monetary policies are all shaping capital flows. As of mid-2025, the U.S. national debt has already surpassed $37 trillion, climbing at a pace of roughly $1 trillion every five months.
Many investors are concerned that soaring deficit spending could be swaying central bank priorities and fueling inflation. In this environment, they are becoming more open to exploring new options, and one of the most significant shifts on that front in recent years has been digital assets.
Take Bitcoin ETFs, for example. Within the year since their approval in January 2024, they’ve already amassed over $100 billion in inflows, making it the most popular ETF of all time. A lot of that growth came as a result of a rapid influx of institutional capital, which helped cryptocurrencies make a very big step from niche to mainstream financial tools.
Moreover, President Trump’s administration is quite crypto-friendly and has paved the way for positive regulatory developments in the U.S. The SEC’s resolution of its long-running lawsuit against Ripple and the new guidance on what qualifies as a security have helped reduce the uncertainty. It marked a symbolic “de-escalation” of regulatory pressure and contributed to shaping clearer legal expectations for the crypto industry
These developments have a direct correlation to investor confidence. Investors tend to stay away from assets they see as unpredictable and bound to land them in trouble — not just in terms of price, but in terms of rules. Now that digital assets are increasingly seen as legitimate, they are set to attract new capital.
Crypto is becoming a hedge
The idea of digital assets as a hedge isn’t exactly new, but it’s gaining more serious attention. For fund managers, their low correlation with traditional asset classes is precisely what makes cryptocurrencies appealing. It means they can play a role in improving portfolio diversification and enhancing risk-adjusted performance.
Based on the data my own company has collected over 2019–2025, even a small allocation can make a difference. For example, adding just 1% of Bitcoin to a traditional diversified portfolio (invested in U.S. equities, international equities, and fixed income) has consistently decreased volatility and improved the returns and thus the Sharpe ratio. Even in years when the effect was minimal, the impact was never negative in absolute terms.
But there are more benefits to digital assets than just their diversification role. There is also the fact that they are reshaping financial infrastructure itself. Stablecoins, for example, are proving to be an efficient tool for cross-border payments. Instead of relying on slow, costly bank transfers that involve multiple intermediaries, stakeholders can get near-instant settlements at lower cost.
This utility gives digital assets a double edge: they not only diversify portfolios but also bring a new level of efficiency to financial operations.
Staying resilient
So, where does this leave alternative funds? Tariffs and trade policies will no doubt continue to create short-term waves. Yet, alternative funds are built sturdy enough to navigate this kind of turbulence.
By combining traditional expertise with diversification and selective exposure to crypto assets, alternative funds are capable of offering investors stable results even amidst the uncertainty.
