WEST PALM BEACH, FL (HEDGECO.NET) – A new report by the Australian Financial Review shows that hedge funds and other financial institutions such as securities firms borrowed more money from banksduring the first quarter of 2004. According to the new report, which quoted the Bank for International Settlements data, hedge funds and others borrowed US$213.5 billion across the world during thefirst three months of the year.
This borrowing accounted for nearly 77% of the total sum of US$277.4 billion borrowed globally in 2003 by such groups. According to the report, during the first quarter of 2003, these groups borrowed a total of US$142 billion. The new report said hedge funds borrowed a significant portion of the new assets. It should be noted however, that the global hedge fund industry experienced significant asset inflows during the fourth quarter of 2003, as well as during the first quarter of 2004.
The Bank for International Settlement said, “Nearly one-quarter of the increase in US dollar-denominated loans to non-banks and nearly two-thirds of euro-denominated loans flowed to non-bank borrowers in offshore centers, Luxembourg and the UK, this occurred in a quarter in which hedge funds enjoyed a record net inflow of funds.”
Hedge fund investors continued to seek out equity-oriented strategies during the first quarter of 2004. According to TASS data, hedge funds gained a record $38.2 billion in net assets during the first quarter of the year, marking a fourth consecutive quarterly record for industry inflows. Hedge funds took in $26.8 billion during the fourth quarter of 2003 according to data compiled by TASS Research. The fourth quarter capped off the best year ever for the global hedge fund industry, according to TASS Research, capturing net inflows of $72.2 billion for the year 2003.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
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