The hedge fund industry is reaching new heights, as assets shot to a record level of $665 billion, driven primarily by broad-based performance, according to Hedge Fund Research, Inc.

The industry’s assets increased $47 billion in the second quarter, with a mere $1.4 billion of that coming from new assets. Hedge funds were aided by stronger economic data and a rally in the equity markets.

HFR estimates that there are 5,660 funds, including funds-of-funds, with 281 of those launched this year. Funds-of-funds also grew significantly during the quarter, taking in $87 billion in net assets. Equity hedge funds suffered outflows of $5 billion in the quarter, despite strong performance gains, according to the firm.

"Second-quarter hedge fund returns were reflective of many of the factors that drove long-biased equity and bond returns: aggressive monetary policy and fiscal stimulus, improvement in corporate earnings, lower oil prices and a relatively quick resolution to the conflict in Iraq," said HFR president Joshua Rosenberg, in a statement.

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