Hedge inflows $41 billion in second quarter

Investors placed $41.1 billion in assets into hedge funds during the second quarter, pushing industry assets to an estimated $1.67 trillion by the end of June, according to the Lipper TASS Asset Flows report. The gains marked the second-largest quarterly inflow since the second quarter of 1994, when inflows totaled $43.3 billion. The report cited "relatively strong performance" by the Credit Suisse/Tremont Hedge Fund Index, which increased 5.19% by June 30, according to the report. However, the Standard & Poor's 500 index returned 5.28%, while the MSCI World TR index returned 6.71%. The largest inflows were experienced by the Long/Short equity strategies, which gained $14.9 billion, followed by event-driven funds and multi-strategy funds, which gained $12.2 billion and $6.1 billion during the period, respectively. Strategies that posted net outflows included the global macro funds and managed futures, which lost $848 million and $686.7 million, respectively. "There were many strategies that were subprime related that have been impacted negatively," said Ferenc Sanderson, senior research analyst at Denver-based Lipper Inc. "I don't think it will be protracted because there are already some indications that a number of funds that had losses managed to recover on August." "It is too early to say what performance will be," he added.