Assets invested in hedge funds grew 1.5% in July to $2.6 trillion, according to analysis from HedgeFund.net. Despite extreme market turmoil in the last week of July, HedgeFund.net estimated net inflows at $30.6 billion for the month.
July was the first month in a new quarter following a six-month period when hedge funds produced annualized returns of just over 14%. The allocation process takes time, and new allocations to funds in July were likely the results of strong industry performance in the first half of 2007, Donald C. Cacciapaglia, CEO of parent company Channel Capital Group, said in a news release.
Strategies attracting the largest net inflows in July were distressed, $7.5 billion; emerging markets, $7.4 billion; and long/short equity, $6.6 billion. Strategies with the biggest net outflows were market neutral, $1.8 billion; fixed-income directional, $640 million; and fixed-income arbitrage, $600 million.