Report Finds Third Quarter Inflows Into Hedge Funds Stable At 1.6%

Tremont Capital Management reported hedge fund asset flows held stable at 1.6% for the third quarter of 2005. It also found that emerging market hedge funds gained assets at a rate of 7.8%, as investors increased allocations, and convertible arbitrage

By None

Tremont Capital Management reported hedge fund asset flows held stable at 1.6% for the third quarter of 2005. It also found that emerging market hedge funds gained assets at a rate of 7.8%, as investors increased allocations, and convertible arbitrage trailed with outflows of 5.5% of assets.

“While investors’ overall interest in hedge funds is regaining momentum, it’s growing at a slower rate than the long term average quarterly growth rate of 2.7%,” said Robert Schulman, CEO of Tremont Capital Management.

Tremont’s Asset Flows Report showed that, for the third quarter, the strategies that attracted the greatest amount of net assets in absolute terms were long/short equity, event-driven and emerging markets strategies, showing inflows of $5.6 billion, $3.9 billion and $2.9 billion, respectively.

Schulman said that the expertise and flexibility of the long/short equity manager is attractive to investors concerned about the instability of the current markets. He said a sense of caution has led investors back to strategies usually shown to work in challenging markets such as event-driven and multi-strategy. As far as the gains in emerging markets, he attributes them to the success of markets in Eastern Europe and parts of Asia and Latin America — including China and Brazil.

The quarterly Tremont Asset Flows report is based on an asset base of approximately $800 billion in hedge fund assets, of which Tremont claims $10 billion.

«