Investors add billions to hedge funds in late 2009

BOSTON Jan 12 (Reuters) - Investors around the world, encouraged by strong returns, poured billions of dollars into hedge funds late last year even though they pulled some money out in December, new data released on Tuesday show.

Pension funds, endowments and wealthy individuals invested $18.7 trillion with hedge funds in November, more than twice the $8.2 billion they added in October, TrimTabs Investment Research and BarclayHedge said.

Hedge funds took in $54 billion in August, September, October and November, TrimTabs and BarclayHedge said.

"Flows into hedge funds are back to pre-crisis levels," said Sol Waksman, founder of BarclayHedge.

Hedge funds now invest $2.034 trillion, industry research firm HedgeFund.net reported.

Investors have yet to put back the record $402 billion they removed from hedge funds between September 2008 and July 2009. On average, hedge funds gained 20 percent last year.

Since hedge funds are not required to report their asset flows or performance numbers, all reports from research companies like BarclayHedge and HedgeFund.net are closely watched for possible trends in the industry.

After months of positive flows, investors' enthusiasm ebbed late in 2009, according to HedgeFund.net, which reported that $4.07 billion was removed from hedge funds during the month.

"Hedge fund assets rose slightly in December supported by performance; investor flows were slightly negative," the group reported. (Reporting by Svea Herbst-Bayliss)