Hedge funds (hedge fund news) are gaining momentum. Global hedge funds accepted $16.6 billion in new investments in February, as pension funds and wealthy individuals bought in the wake of strong performances, according to Reuters.

The "flood of new money helped raised assets in the loosely regulated industry to $1.5 trillion, the highest level since the financial crisis." Many are expecting net assets in the industry to hit the $2 trillion mark at some point this year or next. It would be tempting to conclude that the hedge fund industry is back in a big way. Investors are no doubt chasing strong gains across various classes. Hedge funds on average have gained 3.50 percent in the first quarter, after a roughly 20 percent gain in 2009.

The thinking remains that pensions remain under extreme pressure to enhance their returns, and that will all but force them into more alternative investments. Last week, the $132 billion California State Teacher Retirement System or CalSTRS, which had not invested in hedge funds before, began looking for a consultant to help identify possible hedge fund investments, notes Reuters.

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