Event-driven hedge funds see record inflows
By Alistair Barr, MarketWatch
Last Update: 5:08 PM ET Jun 18, 2007
Short-selling managers also pull in record amount of money in first quarter
SAN FRANCISCO (MarketWatch) -- Event-driven and short-selling hedge funds pulled in a record amount of money during the first quarter, according to a report released by Lipper on Monday.
Event-driven managers saw record net inflows of $9.83 billion in the quarter and now oversee $244 billion in assets, Lipper found.
Many event-driven hedge funds bet on the outcome of mergers and acquisitions. A buyout boom this year has helped boost performance and attract more investors, said Ferenc Sanderson, a senior research analyst at Lipper.
Short-biased hedge funds, which bet on falling prices, also attracted record investor interest in the first quarter, albeit from a much lower asset base. These managers saw net inflows of more than $215 million in the period, a record, and now oversee $3.1 billion in assets, Lipper found.
"When you have markets in the U.S. and elsewhere hitting record highs, then there'll be a tendency for money to go into those (short-biased) areas as a hedge more than anything else," Sanderson said.
The previous record for inflows into short-biased hedge funds was during the first quarter of 2000, when managers took in a net $183 million, Lipper noted. That was right as the dot-com stock market bust began.
Total hedge-fund assets tracked by Lipper stood at $1.1 trillion at the end of the first quarter. That's up 24% from a year earlier. That suggests the whole hedge-fund industry oversees more than $1.5 trillion in assets, the firm estimated.
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