The hedge fund universe approached the $1 trillion mark after gaining $193 billion of new assets last year, CBS MarketWatch reports.

Inflows into the largely unregulated asset class climbed 17% in 2004 to $934 billion of assets, according to Hennessee Group, a hedge fund consultant. Ordinary stock mutual funds grabbed $1 billion during the same period.

At the same time, the herd of hedge fund managers swelled to 8,050 from 7,000. But some industry officials fear the growth curve may slow after Feb. 1, 2006, the effective date for new regulations requiring hedge funds advisors to register with the Securities and Exchange Commission.

Many of the inflows into hedge funds last year were driven by increased demand from institutional investors like pension funds, which previously avoided risky and expensive alternative investments. Wealthy individuals and family offices are still the largest hedge fund customer base, which accounts for 44% of the investment category's assets under management. Arbitrage and event-driven hedge funds were the big winners last year and collectively increased their asset levels by 27%. Long-short hedge funds grew by 11% during the same period.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.