Los Angeles Times- Hedge funds had their second-best fundraising quarter in April, May and June, attracting $58.7 billion globally from investors despite growing losses in investments backed bysub-prime mortgages.
The hedge fund industry, which took in a record $60 billion in the first quarter, now oversees $1.74 trillion, up 22% from the end of 2006, said Chicago-based Hedge Fund Research Inc. That increasereflects investment gains as well as cash inflows.
The average hedge fund worldwide returned 7.7% in the first half of 2007, beating the Standard & Poor’s 500 index’s 6.9% gain including dividends.
“Hedge fund flows follow performance, and hedge fund performance has been excellent,” said Brett Barth, a partner at New York-based fund investment firm BBR Partners.
The data indicate that exposure to securities backed by sub-prime mortgages “has not yet resulted in a generalized, systemic impact on indexes of creditfocused hedge funds or on the broader hedgefund universe,” Kenneth Heinz, president of Hedge Fund Research, said in a statement.
