Hedge funds globally attracted $60 billion in new money in the first quarter, almost half what they raised all of last year, as institutions shrugged off the industry’s subpar investment gains.
Inflows more than tripled from the final three months of 2006, Chicago-based Hedge Fund Research Inc. said Thursday in a statement.
Deposits slowed in late 2006 as returns trailed market indexes and clients reacted to the collapse of Amaranth Advisors LLC. The first-quarter surge brought industry assets to $1.57 trillion.
“Returns last year didn’t hit the ball out of the park, and you had Amaranth toward the middle of the year, but that was really perceived by many as a blip,” said Marina Lewin, managing director of Bank of New York Co.
The inflows show institutions are increasing their reliance on the private pools of capital to boost investment gains. Endowments, pension managers and corporate retirement plans are expected to triple their allocations to hedge funds worldwide to more than $1 trillion by 2010, according to a 2006 survey by Bank of New York and consultants Casey, Quirk & Associates LLC.
