Bloomberg- Hedge funds attracted $16.5 billion of new cash in the first quarter, the smallest inflows since the end of 2005, as a credit drought, falling home prices and a U.S. economy on the brink of recession damped investor enthusiasm.
The drop in deposits followed a record 2007, when investors pumped $194 billion into the loosely regulated investment pools globally, according to a report today by Chicago-based Hedge Fund Research Inc. Industry assets rose 0.4 percent in the quarter to $1.88 trillion, the smallest increase in four years.
“The financial-market volatility which characterized the second half of 2007 accelerated in the first quarter of 2008, Kenneth Heinz, president of Hedge Fund Research, said in a statement.