More capital was added to hedge funds over the three-month period than in all of last year. And the record $8.4 billion figure was roughly equal to the total invested in hedge funds in the first quarter of 2001.
The number represents the largest quarterly inflow since the company began tracking fund flows in 1994.
Funds utilizing Event Driven and Long Short Equity strategies received the largest inflows over the period, both increasing by $2.5 billion, with the former category experiencing its largest quarterly inflow since early 1998, and the latter capturing 29% of the quarter’s new assets.
Convertible Arbitrage attracted $2.4-billion in net assets, and funds using this strategy doubled the assets taken in during the previous quarter, the number rising in line with the record number of new issuance in the US market.
Much of the new capital flowed into the distressed investing sub-strategy as reduced deal flow and tighter spreads dampened investor sentiment for risk arbitrage, according to TASS Research.
Equity Market Neutral gained $1.2-billion in net assets for the period on the back of strong demand, while Fixed Income Arbitrage funds added $461-million in new assets, its largest inflow since the second quarter of 1998.
Managed Futures and Emerging Markets recouped first quarter losses. The former adding $276 million after investor concerns on inflation and market volatility subsided, and the latter receiving $248 million on bargain hunting.
The only strategies to record net outflows during the quarter were Global Macro and Short Selling, losing $1.2 billion and $40 million respectively.
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