HFN (HedgeFund.net) released its first monthly estimates of hedge fund asset flows. The data is for July 2007. Contrary to prior industry reports indicating hedge funds experienced net redemptions in July, HFN estimates a net inflow of new assets to hedge funds of $30.6 billion in the first month of Q3 2007. The inflow in several strategies, along with performance gains, brings total estimated hedge fund assets to $2.63 trillion, a monthly increase from the end of June 2007 of 1.50%.

According to Donald C. Cacciapaglia, CEO of Channel Capital Group which owns HedgeFund.net: "July was the first month in a new quarter following a six month period when hedge funds produced annualized returns of just over 14%. The allocation process takes time and new allocations to funds in July were likely the result of strong industry performance in the first half of 2007."

  Strategy Specific Flow Estimates for July:
  -- Long/Short equity fund assets increased 0.98% with new allocations of
     $6.64 billion.
  -- Market neutral strategy assets declined 2.59% with outflows of $1.83
     billion due to redemptions and liquidations.
  -- Distressed strategy assets increased estimated 7.51% with new
     allocation of $7.53 billion.
  -- Emerging market fund assets increased 4.77% with new allocations of
     $7.42 billion.
  -- Event Driven and Special Situations fund assets increased 0.49%
     including $2.93 billion in new allocations.
  -- Multi-Strategy fund assets increased 1.38% with new allocations of
     $5.08 billion.
  -- Merger arbitrage strategy assets declined 2.57% with net redemptions
     totaling $360 million.
  -- Fixed income directional strategy assets fell 3.35%, the biggest drop
     of any strategy, with net redemptions totaling $640 million.
     Performance losses reduced assets an additional $1.59 billion.
  -- Fixed income arbitrage strategy assets declined 0.87% due to net
     redemptions of $600 million. Performance losses reduced assets an
     additional $330 million.

In August, hedge fund performance was down an average of 1.45%. August asset flow data will be released shortly.

HedgeFund.net (HFN), a division of Channel Capital Group Inc, manages a database of more than 7,500 active hedge funds, funds-of-funds and CTA/managed futures products.

Source: HedgeFund.net

Web site: http://www.hedgefund.net/