Hedge funds see $41 billion net inflow in third quarter

Date: Monday, December 24, 2007
Author: Reuters

FRANKFURT (Reuters) - The hedge fund industry recorded net inflows of $41.1 billion (20.7 billion pounds) in the third quarter, taking assets under management (AUM) up to an estimated $1.73 trillion, research firm Lipper said on Friday.

The hedge fund industry's AUM exceeds the combined gross domestic product of the world's low-income countries, home to 2.4 billion people, according to the World Bank's definition, and is just below one-tenth of the market value of all domestic shares listed on the New York Stock Exchange.

The third-quarter net inflow was the third highest in any quarter, according to the Lipper Tass hedge fund database, whose information stretches back to January 1994.

"Growth came from ongoing institutional allocation in a period of heightened volatility across many asset classes," Lipper, a Reuters company, said in a report.

In the first nine months of 2007, hedge funds saw net inflows of $101.1 billion, up 9 percent year-on-year.

Broken down by strategy, event-driven hedge funds saw the biggest net inflows in the third quarter, $15.5 billion, followed by long/short equity and multi-strategies.

Fixed-income arbitrage saw the biggest net outflows, $5.1 billion, Lipper said.