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Hedge-Fund Assets Rise for First Time in Year to $1.43 Trillion

Date: Tuesday, July 21, 2009
Author: Cristina Alesci, Bloomberg

Hedge-fund assets grew for the first time in a year, to $1.43 trillion, as investment performance improved and customer withdrawals decreased in the second quarter, according to data compiled by Hedge Fund Research Inc.

Assets rose $100 billion from April through June as funds posted an average gain of 9.1 percent, the best in more than nine years, the Chicago-based company said in a statement today. The quarter’s asset growth was the first since the industry reached a peak of $1.93 trillion in June 2008.

“The combination of improved credit markets, gains in emerging markets and decreased risk aversion have driven broad- based gains,” Kenneth Heinz, president of Hedge Fund Research, said in the statement.

Investors removed $42.8 billion in the three months ended in June, the second consecutive quarter that withdrawals slowed. Redemptions reached an all-time high of $152 billion in the last three months of 2008 and fell to $103 billion from January through March.

Investors took $33 billion from funds that invest in other hedge funds in the second quarter. Assets in those pools fell to $530 billion from a peak of $825 billion in middle of 2008.

The number of hedge funds, including those overseen by a single manager, were little changed at about 8,900, Hedge Fund Research said.

To contact the reporter on this story: Cristina Alesci in New York at calesci2@bloomberg.net