The hedge fund industry has recovered most of the ground it lost during the financial crisis.

Hedge funds industry added nearly $149 billion in assets in the fourth quarter of 2010, finishing the year with $1.917 trillion, according to data released Wednesday by Hedge Fund Research.

The year-end figure is just shy of the industry’s historical peak of $1.93 trillion in the second quarter of 2008, and it represents an increase of 44% since the first quarter of 2009.

(To put the hedge fund industry’s size in perspective, assets in U.S. mutual funds totaled $11.49 trillion at the end of November, down 0.2% from the end of December 2009, and assets in exchange traded funds totaled $927 billion at the end of November, up 25% from the end of December 2009.)

Most of the increase in hedge fund assets in the fourth quarter and full-year 2010 was attributable to performance; the broad-based HFRI Fund Weighted Composite Index returned 5.5% in the fourth quarter and 10.5% for all of  2010.

Investors added $13.1 billion of to their holdings in the fourth quarter, and that was down from the $19 billion of new money the industry attracted in the third quarter. For 2010 as a whole, hedge funds attracted $55.5 billion of new money.

By comparison, investors pulled $131.1 billion from hedge funds in 2009 and $154.5 billion in 2008.

The largest funds – those with more than $5 billion in assets – attracted the lion’s share of new money in 2010, more than 80%. But they grabbed a far smaller share in the fourth quarter of the year, just 51.6%, which HFR said demonstrated “increasing risk tolerance” by investors.

HFR President Kenneth J. Heinz said in a press release that the global investors are “focused on the dynamics of inflation protection, strategic specialization, enhanced liquidity, improved structure and transparency for accessing hedge fund performance with in coming years.”