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The amount of money going into hedge funds hit a five-year high in September, a sign that the industry is returning to levels not seen since the start of the financial crisis.
Net asset flows for the year reached $95.3 billion, the highest level of inflows in five years, while assets in long/short equity hedge funds crossed the $600 billion mark for the first time since 2008, according to Eurekahedge, the research company.
(Read more: Meredith Whitney launching a hedge fund)
Hedge funds have suffered a torrid few years following the beginning of the financial crisis in 2008, as the value of their investments shrank and investors took their money out in favor of less riskier assets. In September 2008, at the time of the Lehman Brothers' collapse, the industry lost around $79 billion in just one month, including $44.5 billion of investment losses and $34.5 billion of investor withdrawals, according to Eurekahedge.
September 2013 is a different story. Total assets in industry rose by $4.2 billion to $1.91 trillion, just 2 percent below their historical peak in June 2008.
(Read more: The stocks hedge funds love most)
However, there seem to be wide differences across the sector. Hedge funds as a whole seem to have underperformed the market. In September, the Eurekahedge hedge fund index was up 1.18 percent, while the MSCI World Index, a measure of global stock market performance gained 3.87 percent.
Activist hedge funds and those specializing in distressed debt seem to be having particularly good years. The Absolute Return Event Driven Index, one of the key trackers of activist hedge funds, is up 9.24 percent this year to the end of September. And a number of the highest profile funds are performing well.
(Read more: Return of the activist investor)
Dan Loeb's Third Point Offshore, which has recently launched an attack on the management of venerable art house Sotheby's, is up 18.0 percent through September, and veteran Nelson Peltz's Trian Partners is up around 30 percent, according to Alpha, the hedge fund specialist magazine.
- By Catherine Boyle, CNBC. Twitter: @cboylecnbc.