In spite of the demise of the Tiger funds and the restructuring of the Soros funds, hedge funds have continued to grow rapidly over the past six years, quadrupling in assets during that time, according to a report from TASS Investment Research of London.

Between January 1994 and June 2000, hedge fund assets nearly quadrupled from $45 billion to $205 billion, the hedge fund research company announced. Hedge funds attracted $60 billion of new money and grew by an additional $100 billion during this time, according to TASS.

However, TASS estimates total assets under management for the hedge fund industry to be between $350 billion to $400 billion. Roughly $50 billion is in private managed accounts and another $100 billion is invested in funds that "refuse to report to TASS or any other information service," according to the firm. TASS has a database of 2,200 hedge funds.

Equity-oriented hedge funds, and particularly market-neutral equity hedge funds, have been most popular in the past six years, said Nicola Meaden, chief executive officer of TASS and managing director of Tremont Advisers, TASS' parent company.

"Our data shows a consistently increasing appetite for equity market neutral styles even as overall market volatility has increased," Meaden said.

However, the tremendous popularity of equity market-neutral hedge funds is making them run out of instruments in which to invest, TASS said.

"Capacity is a major concern for many of these market-neutral strategies," said Bruce Ruehl, managing director and chief investment strategist of Tremont Advisers. "There is a serious limit to how much can be effectively managed."

As market-neutral hedge funds have increased in popularity, global macro funds' popularity has waned, TASS said. Outflows of assets have "plagued" global macro for the past six years for almost every quarter except between the third quarter of 1997 and the third quarter of 1998, TASS said.

"Investors started voting with their feet long before Tiger Investment Management announced that they were closing down their funds, or Soros Fund Management announced their restructuring," the TASS report said. "Since the beginning of 1994, there has been a cumulative outflow of assets from global macro."

In the event-driven category, which includes distressed securities investing as well as merger arbitrage, money has moved into the arbitrage sector and out of the distressed sector, TASS said. This has been prompted by the large number of mergers and acquisitions taking place, and by the shrinkage in junk bonds, according to TASS.

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