The hedge fund industry saw record inflows of more than $60 billion during the first quarter of 2007, bringing total assets under management to $1.568 trillion, according to data released by Hedge Fund Research (HFR).
After a relatively quiet end to what was still a record-breaking year in 2006, investors have begun pouring money into hedge funds at a pace we have never seen before. To put the first quarter inflow into perspective, during the first three months of 2007 as much new money was invested in hedge funds as was recorded during the last six months of 2006, said Ken Heinz, president of HFR.
The trend in asset flow suggests that both individual and institutional investors are actively allocating to hedge funds, while the performance indicates hedge funds are exceeding these investors’ expectations, he added.
These new inflows represented an almost 300 percent gain over 4Q 2006, when the industry recorded $15.7 billion in new fund flows, and was equal to nearly half the record $126 billion in new assets gathered by hedge funds in all of last year.