Hedge Fund Inflows Increase 54% In ‘07

Jan 15 2008 | 4:14pm ET

Hedge funds set yet another record for inflows last year, as the industry added $194.5 billion in new capital, Hedge Fund Research said. The inflow represents a 54% increase from 2006, when the industry attracted $126.5 billion.

Hedge funds now manage some $1.87 trillion, HFR said.

But for the third straight year, investors soured somewhat on hedge funds in the fourth quarter. Less than 16% of 2007’s new money, or $30.4 billion, flowed into hedge funds during the last three months of the year.

“It was another record year for hedge fund when it came to attracting new assets in spite of the slower pace in the fourth quarter,” Kenneth Heinz, HFR president, said. “The trend in strategy allocations suggests investors are not chasing the best performers, and are anticipating continued opportunities in arbitrage and event-driven.”

Indeed, relative-value arbitrage added $45.9 billion in new assets last year, the most of any strategy. Event-driven funds came in second, adding $41.5 billion in 2007—but just $14 million last quarter.

Funds of hedge funds now manage $798.6 billion, adding $59.2 billion last year. Last year, funds of hedge funds added $49.7 billion.


In Depth

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

Concerned About Your HFT Exposure? Hedge It!

Mar 26 2015 | 1:06pm ET

High-frequency trading has been a persistent storyline for several years. The trading...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note