European investors ploughed $22.8bn (€17.4bn) into hedge funds last year, a 15% increase on the previous year despite a downturn in investment performance.

The amount was raised across a larger number of slightly smaller new funds than in the past. Hedge fund managers launched 253 new funds in 2004, according to EuroHedge, the industry magazine. They launched 228 new funds in 2003.