In the third quarter, hedge funds added $45.2 billion in new assets, says Hedge Fund Research. The good news is that industry is on pace to break last year's annual record of about $130 billion. The bad news is that the flow of new assets is slowing. Still, it hasn't slowed to the point that we can say the credit crunch has marked a new inflection point. Where else are the big institutions going to invest? You could argue that private equity funds are competing for new assets, but I see them as complementary. There may be some pensions that lose their nerve and seek to scale back. My guess is that most will plow ahead with their investment plans. - Jim