October 21, 2006

Record Inflow into Hedge Funds

-- By Pushpa Sathish, Staff Writer

Contrary to recent reports, the hedge fund industry doesn’t seem to show signs of slowing down. Not if the report from Hedge Fund Research Inc. stating that $44.5 billion was invested in funds over the past three months is to be believed. One can only conclude that Amaranth’s downfall doesn’t seem to have had the intended effect. This amount is the highest registered for a quarter since 2003. The total investment so far this year is a record $110.6 billion, a significant jump from the $46.9 billion gleaned in 2005. Bloomberg reports:

The previous annual record was $99.4 billion in 2002. Managers are pulling in money even as average hedge-fund returns have lagged behind those of stocks and bonds over the past six months.

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