NETHERLANDS - Dutch hedge funds returned 4.1% over the second quarter in contrast to hedge funds worldwide, which largely incurred losses over the period, according to figures from the Dutch financial supervisor (DNB).

The DNB attributed the performance mainly to the strength of the US dollar, which appreciated by 5.7% against the euro, as a large number of Dutch hedge funds are invested in US hedge funds.

According to the regulator, combined assets in Dutch hedge funds increased by €2.3bn to reach €19.8bn in the second quarter, due mainly to deposits from institutional investors.

The DNB said that, within the euro-zone, the Dutch hedge industry was currently second only to Ireland, which manages nearly €80bn in hedge funds assets.

By comparison, the industries in France (€2.7bn) and Germany (€1.6bn) are still relatively small.

The regulator attributed the strong growth of Dutch hedge funds since early 2010 mainly to the establishment of tax-transparent 'funds for joint account' by pension funds or their asset managers.

Pension schemes in particular have placed the investments they keep directly on their balance sheet into these new funds, the supervisor said.

The number of Netherlands-based hedge funds is 96, of which 30 are funds of funds and 66 are direct hedge funds.