Merger-arbitrage funds added $703 million in new assets and fund-of-fund hedge funds tacked on another $4.4 billion in new investments. With the gain, fund-of-funds now control roughly a third of all the money invested in hedge funds – $225.2 billion, according to a Reuters report.
Much of the asset gain was performance based as Hedge Fund Research Inc’s (HFRI) Fund-Weight Composite Index rose 4.32% on the emerging markets, stock, commodities, futures and currency positions. Leading this group was emerging markets gaining 10.28% over the past three months after being up 13.0% in the second quarter (See HFR: Hedge Fund Assets Increase $47 Billion In Q2 ).
Other increases were noted in the HFRI Distressed Investments, up 5.5%, while the short-selling index was off 5.3%.
HFRI’s Quarterly Industry Report for the Third Quarter 2003 is available at www.hedgefundresearch.com .