Hedge funds generated returns of 8.02% in 2013 (having returned 0.99% in December) and gained over US$225 billion in assets for the year.
According to the latest Eurekahedge data, hedge fund managers were up 2.53% in H1 2013 and 5.36% in H2.
In terms of strategies, distressed debt funds were the standouts, gaining 16.8% on the year, followed by long/short equities funds (up 14.3%) and event-driven strategies (up 11.3%).
The gain of US$228.8 billion in assets was not only the fastest annual growth on record since 2007, it took total industry assets to a historic high of US$2.01 trillion.
Hedge fund managers attracted US$146.1 billion in the form of net capital allocations during the year, after recording net asset flows of US$109.6 billion in the previous three years combined.
In terms of regions, Asia Pacific funds produced the best returns in 2013, adding 15.3%. Japan and Greater China-focused funds delivered the best returns in that region, adding 25.7% and 19.3%, respectively.
The Mizuho-Eurekahedge Index, an asset-weighted index, finished the year with gains of 6.63% as larger funds slightly underperformed the small and medium-sized funds.
Funds of funds were up 7.79%, their best performance since 2009.