* Fund had reopened after $1.2 bln in redemptions
* Further sign investors return to hedge funds
LONDON, July 28 (Reuters) - Lansdowne Partners, one of the UK's biggest hedge fund firms, has stopped taking money into its flagship $8 billion fund, a source close to the company told Reuters, in a sign investors are returning to the industry. The Lansdowne UK Equities fund has been mostly closed to new investors for six years but after $1.2 billion of redemptions the fund, which occasionally opens up to new cash, took in money from some existing and new clients, the source said.
Lansdowne was Europe's sixth-biggest hedge fund firm at the end of 2008 with $11 billion in assets, according to data from EuroHedge.
Hedge fund firms sometimes limit the size of a fund, even though they earn fees on the assets they run, because they feel performance could suffer if assets continue to grow.
The $1.4 trillion hedge fund industry, which saw record poor performance last year, suffered $300 billion of net outflows between October and June, according to Hedge Fund Research, although there are now signs that redemptions are slowing and some clients are returning. Lansdowne Partners, one of the more secretive hedge fund firms, was one of the winners during the credit crisis through its bet that share prices of some financial firms would fall. (To read the Reuters Hedge Fund Blog click on blogs.reuters.com/hedgehub; for the Global Investing Blog click here) (Reporting by Laurence Fletcher; editing by Simon Jessop)