Investors predict that over $200 billion of net inflows will enter the hedge fund industry in 2011, according to Deutsche Bank’s Alternative Investment Survey, taking the total assets under management to an all time high of $2.2 trillion.

In terms of strategies, equity long/short, event-driven and global macro are predicted to be the best performing strategies. Regionally, the US is predicted to be the best performing area, followed by emerging markets and Latin America.

The survey found that although performance is still the most important factor when assessing a hedge fund manager, 43 per cent of investors cited access to the portfolio manager as a priority factor, above manager pedigree for this year.

The report also noted that institutional investors are increasing their allocations and the size of their hedge fund teams, which was perceived as indication of significant future growth.

“Despite a challenging market environment over the past year, the hedge fund industry continues to trend upward, with investors predicting a fourfold increase in inflows into the industry in 2011,” said Barry Bausano, co-head of Global Prime Finance and head of equities in North America at Deutsche Bank.

“More than 50 per cent of investors have increased their hedge fund assets under management last year, further cementing the industry’s place in the mainstream,” said Anita Nemes, global head of capital introduction.

Deutsche Bank’s Alternative Investment Survey was conducted in January 2011 by the Hedge Fund Capital Group within the bank’s Global Prime Finance business. Investor entities worldwide, representing more than $1.3 trillion in hedge fund assets, participated in the survey. Respondents include public and private pensions, foundations and endowments, sovereign wealth funds, funds of funds, private banks, investment consultants and family offices.