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

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

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

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

Long-short equity managers, who take bets on both rising and falling stocks, and global macro managers should see more favorable conditions this year, Heinz said. Macro strategies invest in stocks, bonds, currencies, and other instruments based on expected trends in global markets, and many were hampered in recent years by central banks' debt repurchases, known as quantitative easing.

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

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