Hedge funds had been on a roll. But that sweet run ended last week when hedge funds fell by 1.43%, erasing any gains for the month of October.

According to analysts at Merrill Lynch, those losses were led by equity long/short hedge funds (-3.0%), macro hedge funds (-1.7%), and commodity trading advisers (-1.3%).

While anecdotal evidence suggests that hedge fund launches are picking up in the second half of the year, the amount of seed capital available from institutional investors has dropped by 44%.

Hedge funds have become the most popular place for new investment in Brazil as the country’s industry posts some of the best hedge fund returns in the world.

Despite the big returns, most hedge funds are trailing the broader markets this year. But few hedge fund strategies trail their benchmarks by as much as commodity hedge funds, which often don’t even have the double-digit returns to help them sleep better at night.

Hedgebay Trading Corporation has launched a new index to track the secondary hedge fund marketplace.

The global hedge fund industry grew for the fifth-straight month in September, according to Eurekahedge, which declared the era of big net redemptions stemming from the economic crisis over.

In a recent survey of 103 institutional investors, TheMarkets.com found that 27% of those surveyed think that the market has yet to hit its bottom.

Hedge funds soared in the third quarter, topped off by a 3.1% return in September, according to Morningstar.

Hedge funds enjoyed modest net inflows in the third quarter.

A strong September gave hedge funds their best third quarter in a dozen years, according to the Credit Suisse Index Co.