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24 Oct 2006

Hedge Funds see Record Results

Hedge Fund Research(HFR) reported this week that hedge funds took $44.5 billion in the third quarter this year, almost as much as the $46.9 billion invested in the whole of 2005.

HFR said that hedge fund assets under management grew to $1.34 trillion, the most the hedge fund research firm has seen since its inception in 2003. HFR President Joshua Rosenberg said
“This has been another record quarter and it looks as if it will be a record year,”

Rosenberg also said “While quarterly performance was again less than spectacular, the flow of new assets into the industry remained remarkably strong,.......This may suggest that investors are taking a longer-term perspective with regards to how they allocate assets to hedge funds.”

HFR reported that over half of the new money went to multistrategy funds, equity hedge and event-driven strategies. On average, hedge funds returned just over 1 percent in the third quarter, putting performance this year through the end of September at 7.1 percent.

Funds of hedge funds also had a record quarter for inflows, despite year-through-September returns of just 4.77 percent. They collected $23.8 billion over the quarter, up from $15.6 billion in the second quarter and more than double last year’s net inflow of $9.5 billion.

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