Hedge funds took in $38.2 billion in new assets in the first quarter of the year, marking the fourth consecutive quarter hedge funds have taken in record sums, Tass Research, a division of Tremont Capital Management, reported. This marked a 42.5% increase from the $26.8 billion hedge funds took in during the previous quarter and a whopping 445% increase from the $7 billion they took in during the first quarter of 2003. In the second quarter of last year, they took in $13.8 billion and in the third quarter, $24.6 billion.
For the third quarter in a row, the three most popular strategies were long/short equity ($8.2 billion), event-driven ($6.9 billion) and global macro ($5.5 billion), which accounted for more than half of the asset flows.
Robert Schulman, co-CEO of Tremont Capital, attributed the strong flows to interest by institutional investors in alternative strategies, individual investors desire to diversify outside of the broad markets and cash that had been on the sidelines during the bear market.