It seemed like it was just a matter of time, and now that time apparently has come.
Hedge fund industry assets topped US$1 trillion during the first quarter of 2005, according to new data from Hedge Fund Research Inc. The industry took in US$27.35 billion in the Jan. 1 through March 31 period, and all strategies earned 0.88% in the first quarter, all of which added to an asset base estimated to be US$972.6 billion as of Dec. 31.
"The recent milestone of [US]$1 trillion in industry assets is further evidence that hedge funds continue to appeal to those investors seeking diversified returns without correlation to equity and bond markets," said HFR President Joshua Rosenberg in a statement. "The first quarter again demonstrated the advantage of this approach, with hedge funds in the aggregate outperforming the major market indices."
The Standard & Poor's 500 stock index fell 2.59%, or 2.15% with dividend returns included. The Morgan Stanley Capital International World Index fell 1.55% in the first quarter.
Event-driven hedge fund strategies gathered the most new assets in the first quarter, with investors placing US$5.9 billion with such managers. Relative value arbitrage managers took in US$4.6 billion in new assets, and equity hedge strategies took in US$4.2 billion, according to HFR.
Only one strategy–convertible arbitrage–saw a net outflow of assets in the first quarter. Convert arb managers lost just under US$1 billion in assets between the beginning of January and the end of March.
