Added to record investment of $60 billion seen in the first quarter, hedge funds now oversee $1.74 trillion, up 22 per cent compared with the close of 2006, according to figures from Hedge Fund Research (HFR).
Meanwhile, despite recent losses incurred in the US mortgage market by funds overseen by Bear Stearns, Basis Capital and Braddock Financial Group, HFR's data showed that the average fund returned 7.7 per cent in the first half.
Commenting on the figures, Kenneth Heinz of Hedge Fund Research told Bloomberg that the findings indicate that the sub-prime crisis "has not yet resulted in a generalized, systemic impact on indexes of credit-focused hedge funds or on the broader hedge fund universe."
Among the funds showing the best returns recently has been the Paulson Credit Opportunities Fund, which was up 129 per cent this year until June.
Meanwhile, hedge fund firm Capital Management is up 18 per cent so far this year.