Hedge fund assets will likely top $1 trillion in the first quarter, predicted Hedge Fund Research, based on analysis of 2004 industry data. Hedge fund assets under management were $972.6 billion for the year ended Dec. 31, up by $148 billion, or 18%, over year-end 2003. Net inflows for 2004 were $73.6 billion. The average return in 2004 was 9.1%.
The fourth quarter was particularly strong, with an average return of 5.3%. Assets under management for the quarter were up by $79.6 billion, and cash inflows for the quarter were $26.9 billion.
However, hedge fund growth was more moderate in 2004 than in 2003, when the average return was 19.6%, net inflows were $75 billion and assets grew 31% over the prior year, HFR noted in its year-end report.