Third Quarter Hedge Fund Inflows The Biggest Since '07

Oct 19 2010 | 1:34pm ET

Hedge funds enjoyed their best quarter in almost three years over the past three months, as big inflows and bigger performance gains added $120 billion to the industry's coffers.

Investors added a net $19 billion in new money during the third quarter, Hedge Fund Research reports. Combined with more than $100 billion in performance gains, that amounts to the best quarter for hedge funds since the fourth quarter of 2007.

It all adds up to industry assets of $1.77 trillion, close to it's pre-financial crisis high-water mark.

Relative value and macro funds were most popular with investors, with each adding roughly a net $7 billion. Event-driven funds took in $5.7 billion.

Even funds of hedge funds managed to post their second growing quarter in the last nine with $250 million in net inflows.

Not every strategy was popular with investors. Equity hedge funds suffered a $600 million net outflow.

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