LONDON, Aug 7 (Reuters) - Big investors are turning more

cautious on areas such as passive equities and private credit

this year and are more interested in hedge funds as a sector

than they have been for several years, according to a Goldman

Sachs ( GS ) survey.

The survey showed 27% of large investors said they

wanted to cut their exposure to long-only passive equities in

the second half of the year, compared with 19% in the first half

of the year, according to the report sent to clients and seen by

Reuters on Thursday.

Private credit, which has been the most popular asset

class among large allocators in the last few years, is losing

favour: the survey showed that 31% of investors plan to commit

money to this strategy in 2025, compared with 41% a year ago.

Goldman Sachs' ( GS ) prime brokerage conducted the survey in

July. It surveyed 333 allocators including pension funds,

endowments and sovereign wealth funds that oversee more than $1

trillion of assets.

Passive equities, products tracking broader stock indices,

have lost appeal as markets have been roiled by tariff shocks,

the data from Goldman Sachs ( GS ) showed.

Meanwhile, uncertainty has grown for lending to private

companies that need healthy financial conditions to grow, as

recent data releases have cast doubt on the U.S. economic

outlook.

U.S. duties on imported goods are starting to boost

inflation, risking a period of tepid growth and high prices,

known as stagflation.

Private credit valuations are not always transparent, two

investors at companies overseeing a combined $2 trillion of

assets, told Reuters on Wednesday.

One of the investors said they were considering redeeming

from investments where they could not determine the values, or

so-called "marks", of the portfolios.

Hedge funds had the highest allocator interest, according to

the data from Goldman Sachs ( GS ).

The survey showed that 37% of investors intend to

allocate cash to this sector over the remainder of this year,

unchanged from the first half. However, just 6% say they are

going to decrease investments in it, compared with 10%

previously.

It remained uncertain whether investors would stick to their

allocation plans, Goldman said.

Even though many might want to invest more money in hedge

funds, many were prevented from spending money that was locked

into private markets commitments that weren't seeing income, or

distributions, Goldman said.

Anecdotally, "these pressures may be easing," the bank said.