Hedge funds pulled in a record $38.2 billion in the first quarter of the year, the fourth consecutive quarterly high, as the loosely regulated investment pools continue to win over pension funds and other institutional investors.

Hedge funds now manage about $830 billion, according to Tass Research, a unit of Tremont Capital Management. The company said hedge funds drew $72.2 billion last year, also a record.

Robert Schulman, chief executive of Tremont, said inflows through March 31 were largely a result of "strong interest by institutional investors such as pension funds and endowments to make a first or additional investment to alternative strategies."

Because long-short equity hedge funds are among the most easily understood strategies, they were especially popular with investors, who put $8.2 billion into them last quarter. Other popular categories were event-driven funds, which saw $6.9 billion in new money, and global macro funds, which attracted another $5.5 billion, Tass said.

With the Dow Jones Industrial Average down 4.7% for the year to date and the benchmark S&P 500 index off 1.5%, Schulman said more investors were looking for an alternative to conventional investment strategies.

"Investors have become increasingly aware of the volatility of the broad markets and have become very interested in seeking out absolute return strategies that are uncorrelated to the broad markets," he said. "We are continuing to see investors put money to work in the equity markets that may have been on the sidelines as a result of the difficult period that ended in 2002."

But surveying hedge funds, which are largely unregulated, remains an exercise in well educated guesswork. Previous quarterly inflow figures compiled by Hedge Fund Research, a Tass competitor, said $22 billion went to hedge funds in the first three months of the year.

Tass receives data from funds that manage about $542 billion worldwide, which provide their numbers voluntarily. The quarterly surveys estimate there is another $290 billion in other hedge funds that don't report their figures, and an additional $200 to $300 billion in privately managed accounts that use identical strategies.

Proponents of increased regulation of the estimated 6,800 U.S. hedge funds say regulators need a better idea of which managers are managing the estimated $600 billion in domestic funds.

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