The second quarter of this year saw hedge funds receive their largest inflow of assets in a single quarter since records began, according to figures compiled by hedge fund research outfit TASS.

TASS reports that $8.4bn flowed into hedge funds during Q2, compared with $8bn for the whole of 2000 – the largest quarterly net flow since the TASS Asset Flows report began in 1994.

The influx of money continues a strong year for hedge funds. First quarter figures for 2001 showed a $6.9bn increase.

Event driven, long/short equity and convertible arbitrage strategies accounted for the biggest gains, receiving 88% of the inflows between them.

However, global macro strategies recorded outflows for the quarter – predominantly as a result of the liquidation of Ocelot, a fund managed by Tiger Investment Management.
Short sellers were also on the receiving end of sell offs with the 17% bounce in the Nasdaq and a 5% pick up in the S&P500 cited as potential reasons.

Emerging markets though reversed a sell off trend to record net inflows for the first time since the beginning of 1998.