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Kenneth J. Heinz By Beverly Chandler, Opalesque London:

Estimated inflows into hedge funds of $62 billion over the first half of 2011 show the strongest half year total since the second half of 2007 when the industry saw $75billion come into the business, according to HFR.

The most popular strategy was Macro which lead despite a performance decline in the second quarter as the uncertain environment persists. Macro was closely followed by Relative Value and Quantitative strategies with Macro and Relative Value taking in $ 20 billion despite performance that sat at either end of the spectrum, with the Macro index posting a loss of 1.7% and Relative Value a gain of 0.76%.

The strong second quarter inflows offset a modest performance-based asset decline, and extended the record level of capital invested in the global hedge fund industry to $2.04 trillion says HFR.

Investors liked systematic, quantitative strategies with those receiving $10 billion in new capital across various sub-strategies, including Macro and Systematic Diversified. Equity Hedge strategies were out of favour, with inflows of only $1.7 billion in new capital in the second quarter, bringing the year to date inflow total for Equity Hedge to $8.1 billion, the lowest of the four main strategy groups. After experiencing an inflow of $4.8 billion in the first quarter, Fund of Funds saw a net withdrawal of $2.1 billion in the second quarter with the HFRI Fund of Funds Index showing a drop of -1.2 % for the quarter.

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