The hedge fund industry pulled in a further $24.6bn net in the first quarter of 2005, but convertibl...
The hedge fund industry pulled in a further $24.6bn net in the first quarter of 2005, but convertible arbitrage took a hit with $1.8bn extracted from the strategy over the same period, according to Tremont Capital Management (TCM).
The first quarter net inflow follows net inflows of $16.3bn for the fourth quarter of 2004, and total net inflows of $123bn for 2004.
TCM noted more than $10bn in net assets for the first quarter could be attributed to inflows into funds that had launched in the past year, while a $1.8bn net outflow hit convertible bond arbitrage funds in the first three months.
Event driven, multi-strategy, fixed income arbitrage and emerging markets were the main beneficiaries of inflows from January to March, winning inflows $8.2bn, $6.5bn, $4.3bn and $2.7bn respectively.
The story for convertible arbitrage was not universally negative, however, with the $2.8bn in redemptions somewhat countered by those finding new interest for the strategy, injecting $1bn.
"Investors were seeking out strategies that seem to do best in uncertain market cycles, such as event driven and multi-strategy funds," said Bob Schulman, chief executive officer of Tremont Capital Management.
"Investors are interested in new opportunities as well as in strategies such as convertible arbitrage that have not fared well in order to be positioned for future opportunities in those sectors," he added.
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