Demand for hedge funds stays strong in March

Date: Tuesday, May 11, 2010
Author: Reuters

Global hedge funds took in a strong $7.6 billion in new money in March, although that was less than half the previous month's inflow, data released on Monday showed.

The inflows helped raise assets in the loosely regulated hedge fund industry to $1.64 trillion, the highest level in 16 months, researchers at TrimTabs Investment Research and BarclayHedge found.

Demand for hedge funds remained high as returns stayed strong, with the average hedge fund gaining 2.9 percent in March.

"We've seen a stark shift to the riskiest strategies from the most conservative ones," said Vincent Deluard, Global Equity Strategist at TrimTabs. "Aggressive bets have paid handsomely, and flows are following performance."

Still, the pace fell from February when investors added $16.6 billion in new money. Returns in February were 0.86 percent.

In April, hedge funds returned 1.29 percent, leaving the average fund up 3.79 percent since January, according to data from Hedge Fund Research.