Global investors’ appetite for hedge funds is on the upswing, according to Credit Suisse’s midyear sentiment survey, released Tuesday.

Twenty-eight percent of respondents listed hedge funds as their preferred asset allocation preference for the second half, one percentage point behind private equity and six points ahead of venture capital.

This represents a big turnaround from recent years. In 2016, investors’ preference for hedge funds was negative, then jumped to 12% in 2017. This year, 93% of investors told Credit Suisse they intended to maintain or increase their allocation.

The survey covered 279 global institutional investors, representing more than $1 trillion in hedge fund investments. Respondents included pension funds, endowments, foundations, consultants, private banks, family offices and funds of hedge funds, with 57% of responses coming from the Americas, 31% from Europe/Middle East/Africa and 12% from Asia/Pacific.

Hedge Fund Research recently reported that industry capital in the second quarter totaled $3.2 trillion, setting a new record for the eighth consecutive quarter.

“Investors continue to have increased appetite for hedge funds driven by a variety of factors, including more aligned fees and terms as well as the broader use of customized solutions and nontraditional vehicles, especially managed accounts and co-investments,” Joseph Gasparro, head of strategic advisory and content for Credit Suisse Capital Services, said in a statement.

The survey found that 76% of investors were focused on fees and terms, and 51% on fund expenses.

Credit Suisse said now that the ongoing dialogue between investors and managers includes more emphasis on pass-through fees, quantifying the total cost of running a hedge fund and supporting it with benchmarking could help create an optimal alignment of interests.

The survey results showed that investors increasingly prefer no-traditional investment vehicles in addition to commingled accounts. Most in demand are separately managed accounts/funds of one, used by 56% of investors seeking customization and transparency.

Allocators also showed a strong preferences for co-investments, private credit and longer lock products.

In terms of strategy preferences, discretionary macro topped a list of 10 strategies, favored by 22% of investors that liked its low correlation to risk assets.

Equities remained in favor, claiming five of the top 10 strategy preferences, with interest expressed in a variety of approaches, including equity long/short health care and both fundamental and quantitative market neutral.

In addition, environmental, social and governance debuted on the top 10 strategy list. According to the survey, 25% of investors currently have an allocation to the strategy.

The broader Asia/Pacific region and emerging markets are again most in demand by investors. Asia/Pacific topped the regional preference list, cited by 39% of respondents, followed by 27% for greater China and 22% for emerging markets.

Credit Suisse said that although sentiment had cooled since the start of the year given the emergence of trade tensions, investors still looked at these regions as a longer-term opportunity.

North America experienced the largest positive demand swing as the U.S. economy and stock market continued their upward momentum in 2018.