Hedge fund assets hit a record high at the end of last year as solid market returns from the Donald Trump rally overcame large investor redemptions.
"Total hedge fund industry capital rose for the third consecutive quarter, surpassing the $3 trillion milestone for the first time," Hedge Fund Research said Friday. "The growth of hedge fund assets occurred against a challenging backdrop of continued investor withdrawals."
Investors pulled $18.7 billion of capital from hedge funds during the fourth quarter, according to HFR data. For 2016, the firm said $70.1 billion was withdrawn; the worst showing since $131 billion was redeemed in 2009.
However, fourth-quarter hedge fund assets increased by $46.8 billion to $3.02 trillion due to performance, HFR added. The industry returned 5.5 percent in 2016, its best return since 2013, according to the firm.
The S&P 500 rose 3 percent in 2016's fourth quarter.
HFR's data is similar to eVestment's $3.04 trillion hedge fund asset estimate earlier in this month.