Reuters- Investors continue to flock to hedge funds, with near-record amounts of new money flooding into the industry in the 2007 second quarter, an industry tracker reported on Monday.<\/p>\n
Investors poured some $58.7 billion (28.4 billion pounds) into the lightly regulated industry in the second quarter, boosting industry assets to $1.74 trillion, HFR said. The inflows were just under the record $60 billion the industry gained in the first quarter, HFR said.<\/p>\n
“We still see extremely strong flows into hedge funds,” said Kenneth Heinz, president of Chicago-based HFR.<\/p>\n
Hedge funds, which employ myriad trading strategies often using debt and short-selling, saw the biggest gains in relative value arbitrage, a broad strategy which goes “long” on securities expected to rise against “shorts,” or those viewed as overvalued.<\/p>\n
Relative value arbitrage strategies gained $16.4 billion in new money, HFR said. Equity hedge, another broad category of equity trading strategies, gained $12.6 billion, while event driven funds, which trade on the prospects for corporate mergers, restructurings and other events, gained $9.48 billion in the quarter, HFR said.<\/p>\n
The firm said hedge fund performance for the period remained “strong,” with the average hedge fund posting gains of 4.77 percent, with emerging markets strategies the top performer, up 8.85 percent.<\/p>\n