Hedge funds attracted $150 billion of new assets in the first nine months of the year, a Barclays Capital report said. Hedge fund managers surveyed said assets under management were down an average of 32% from peak levels, but they remained positive about adding more funds.

The report found that hedge funds are now devoting more resources to differentiating themselves as a result of the financial crisis. "Managers can no longer let returns sell themselves," said Andrea Gentilini, Barclays Capital's head of strategic consulting in its prime services division, who wrote the report. "Today's investors want more communication, more due diligence and more transparency. Funds that focus on this have clearly been recognized by investors."

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