Hedge fund flows shrivel in first quarter-data

BOSTON, June 16 (Reuters) - Hedge funds attracted $2.6 billion in net new money during the first quarter, marking an 81 percent drop from what they pulled in during the fourth quarter, data released on Monday showed.

First-quarter inflows to these loosely regulated funds slumped $11.1 billion from the fourth-quarter figure of $13.7 billion, data from Lipper TASS, a unit of ThomsonReuters show.

This marked the fourth consecutive quarterly inflow decline.

Investors have punished managers in the once hot $2 trillion hedge fund industry for poor returns all year.

Data showed last week that pension funds, endowments and rich investors pulled a net $5.9 billion out of U.S. hedge funds in April, marking the industry's biggest outflow in 6-1/2 years.

During the first quarter, the largest hedge fund inflows went to managers betting on big events like mergers or interest rate moves, currency fluctuations and commodity price swings.

In the fourth quarter of 2007, funds specializing in emerging markets, managed futures and multi-strategies pulled in the most money. (Reporting by Svea Herbst-Bayliss, editing by Leslie Gevirtz)