During the quarter, investors allocated $13.7 billion of new capital to the global hedge fund industry; this combined with a performance-based asset increase of $54 billion to bring total industry capital to $1.67 trillion.

All four main strategy areas experienced asset growth in the period, led by Event Driven strategies, to which investors allocated $5.6 billion of new capital. The smallest net inflow occurred in Macro strategies, with these receiving less than $1 billion of new capital.

Inflows were concentrated in the industry’s largest firms. Investors allocated $14.9 billion to firms with greater than $5 billion in assets under management, while firms managing between $500 million and $5 billion experienced net outflows of $3.7 billion combined. The overall concentration of industry assets increased, with firms greater than $5 billion (5.1 per cent of all funds) now managing over 62 per cent of industry capital.

Larger funds narrowly outperformed smaller funds during both Q1 2010 and 2009, with the asset-weighted version of the HFRI Fund Weighted Composite Index gaining 2.8 per cent and 20.3 per cent in those periods, respectively.

Just over half of funds reached their respective high watermark in the previous twelve months.