Tremont: Hedge Funds Pull in $24B in Q105

May 24, 2005 ( - The hedge fund industry gained $24.6 billion in net assets in the first quarter of 2005, according to Tremont Capital Management, Inc.

Tremont’s Asset Flows Report indicated that follows a net inflow of $16.3 billion for the fourth quarter of 2004 and total net inflows of $123 billion for 2004, Tremont said in a news release.

According to Tremont, more than $10-billion in net assets for the first quarter was attributed to new fund launches in the past year.

The flow of hedge fund assets for the quarter also underscored investors’ readiness to back away from poor performing strategies as shown by a $1.8 billion net outflow from Convertible Arbitrage, Tremont asserted in the news release.

For the first quarter, the best performers in terms of asset growth were Event Driven, Multi-Strategy, Fixed Income Arbitrage and Emerging Markets with inflows of $8.2 billion, $6.5 billion, $4.3 billion and $2.7 billion respectively.  Convertible Arbitrage funds – the only category to end in the red for the quarter – received $2.8 billion in gross redemptions and an addition of $1 billion in new assets during the quarter, Tremont said.

The $8.2 billion flow to Event Driven reflected good performance over the past year in this strategy and its sub-categories – distressed and risk arbitrage, Tremont said.  Both Emerging Markets and Fixed Income Arbitrage experienced substantial net inflows relative to their overall assets under management, according to the Tremont Asset Flows data.

The quarterly Tremont Asset Flows Report is based on an asset base of approximately $705.4 billion in hedge fund assets, the company said.