Fundraising Hedge Fund Q1 2012

Fundraising Hedge Fund Q1 2012

Investors Pour $16b into Hedge Funds in First Quarter

$16 billion in new capital was allocated to the hedge fund industry in the first quarter of 2012.  Hedge funds were off to a nice start this year but the industry still on average trails the major indices.  Total industry assets under management reached $2.13 trillion, a sign of returning confidence to the hedge fund industry.
Investors poured billions of dollars into hedge funds in the first quarter, helping to send total industry assets into record territory, data released Thursday shows. 
Investors allocated a net $16 billion to hedge funds in the first three months of the year, according to Hedge Fund Research, which tracks industry flows and performance. 
With the new capital, as well as average gains of about 5 percent for hedge funds in the first quarter, total industry assets reached $2.13 trillion, HFR found. An earlier record was set halfway through 2011, when total capital invested with hedge fund managers hit $2.04 trillion. 
In one of its worst annual performances in history, hedge funds lost about 5 percent in 2011. However, the industry seemed to get its groove back in the beginning of 2012 as global equity and credit markets rallied, and managers recorded the best first quarter of performance in five years. 
"Investors responded favorably to the risk shifting which occurred across financial markets in the first quarter," said Kenneth J. Heinz, President of HFR. "Sophisticated institutional investors are increasingly allocating to hedge funds as a powerful strategic portfolio complement to existing traditional holdings." Source

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