Japan managers lead hedge fund gains in January

HONG KONG Wed Feb 16, 2011 2:13am GMT

HONG KONG Feb 16 (Reuters) - Hedge funds posted positive returns for a seventh consecutive month in January, with Japan-focussed managers leading gainers, Singapore-based fund tracker Eurekahedge said on Wednesday.

Hedge funds globally rose 0.06 percent, while Japan-focussed funds gained 1.26 percent, making it the best performing hedge fund region in the world, comprehensively outperforming the 0.1 percent gain of the benchmark Nikkei 225 Index .N225 in January.

Asset flows into the industry were positive for a seventh consecutive month, with investors allocating a net $3.39 billion, helping the industry grow to $1.68 trillion.

"Although January is usually a slow month for asset flows, the excellent returns posted by hedge funds in the last quarter of 2010 and improving macro-economic fundamentals have led to strong interest among investors to allocate to hedge funds," the firm said in a statement.

European managers led asset growth with net capital inflows at $3.06 billion. Emerging market hedge funds saw smaller outflows on the back of profit-taking, Eurekahedge said. (Reporting by Nishant Kumar; Editing by Chris Lewis)