Hedge-fund assets increased by 17 percent last year, reaching arecord US$2.63 trillion, according to Hedge Fund Research Inc.(HFR).

Global assets rose by $376 billion, including $63.7 billion innet inflows from investors and $312 billion in investment gains,the Chicago-based data provider said in a report today. The fourthquarter was the sixth in a row that the industry saw a growth inassets, it said.

Investors poured $29.6 billion into event-driven strategies,which include activist-oriented hedge funds such as Daniel Loeb'sThird Point LLC and Bill Ackman's Pershing Square CapitalManagement LP.

Event-driven funds had an average return of 12 percent in 2013compared with a 9.2 percent gain for all hedge funds, HFR said. Thecategory is “likely to continue to see strong flows” through atleast the first half of 2014, HFR President Ken Heinz said at apress briefing in London today.

Long-short equity managers, who take bets on both rising andfalling stocks, and global macro managers should see more favorableconditions this year, Heinz said. Macro strategies invest instocks, bonds, currencies, and other instruments based on expectedtrends in global markets, and many were hampered in recent years bycentral banks' debt repurchases, known as quantitative easing.

“I think we're coming out of a very abnormal period in thefinancial markets,” Heinz said.

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