markets and strategies
Aggregated asset flows into hedge funds more than doubled from the fourth quarter last year to the first quarter of 2003, according to a recent manager poll.
The survey carried out by LJH Global Investments and Reuters found that investors put $1.4bn into hedge funds in the first quarter of 2003, representing a significant increase over the previous quarter's inflows of $596m.
LJH cited as a possible reason for the jump in asset flow the rapidity of the conclusion of hostilities in Iraq, and earnings being surprisingly upbeat.
LJH president and chief investment officer James Hedges, said the flows were up 'fairly dramatically but sticking with safe havens is what it is all about now.'
However there are increased concerns about risk management while at the same time the use of leverage to boost returns has declined, the survey found.
In the first quarter, investors put $878.8m into equity hedge funds, and $101m into equity market neutral funds, which are two strategies that attempt to reduce risk.
This follows the pattern of 2002 when investors put $470m into equity market neutral, the bulk of the $596m they put into all funds, according to Reuters.
For the second quarter running, short-biased funds did not benefit from inflows and commodity trading advisers (CTAs) received just $50.1m.
During the first quarter, funds of hedge funds benefited from the largest monetary inflows at $371.8m, up from $283.8m in the last quarter of 2002. High net worth individuals invested $265.9m in hedge funds, and pension funds put in $99.8m, the same as last quarter, according to Reuters.
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