Just $16.5bn in new capital came into the hedge fund market over the course of the volatile first quarter, according to Hedge Fund Research. The US-based hedge fund industry data provider said it was the lowest amount since the fourth quarter of 2005.
Total capital under management was virtually unchanged at $1,875bn, compared to $1,868bn at the end of last year, representing the smallest quarterly increase in assets since the second quarter of 2004.
The slow start to 2008 comes after investors last year allocated a record $194bn in new capital to the industry despite the US credit crisis and wider concerns about the US economy.
However, selected strategies still proved attractive to investors seeking to take advantage of, or hedge against, market conditions. For example, notes the FT report, investors allocated more than $8.2bn in new capital to equity hedge fund strategies, which nonetheless saw total assets under management decline on weak performance.
For a detailed view of HFR’s findings, see CNBC’s video of a presentation by Ken Heinz, HFR president.