The hedge fund industry will quadruple in size over the next six years as it increasingly takes the place of mutual funds as a mainstream investment, say hedge fund managers.

Craig Reeves, managing director of Platinum Capital Management, said he expects the industry to continue growing at its present rate of 30% a year: "We see hedge funds assets under management growing to more than $4 trillion (€3 trillion) by 2010." Hedge fund consultants estimate the industry's assets under management are now at $1.1 trillion.