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Hedge funds 'to attract $210bn this year'

New research has indicated that global hedge funds are set for a bumper year in 2011, attracting hundreds of billions of dollars in new capital and potentially breaking the existing record.

According to a study from Deutsche Bank and Hedge Fund Research, capital inflows could quadruple to $210 billion this year, boosting assets by up to ten per cent after a similar rate of expansion in 2010.

"In 2010, a lot of investors still had to deal with side-pocketed, gated and suspended investments" Deutsche Bank's Anita Nemes told Bloomberg. "The situation this year is more favorable."

The poll revealed that investors were stepping up their interest in hedge funds in anticipation of an average gain of 7.6 per cent this year, as well as predicting that the sector's global assets could hit $2.25 billion.

Last month, Peter Astleford of London law firm Dechert told the Financial Times that funds were growing increasingly concerned over impending European regulations and could opt to move elsewhere as a result.

By Claire Archer