*

Global hedge funds reach 8,464, highest since 2015, per

HFR

*

$33.7 billion new investor money in Q3, highest since 2007

*

Equity hedge funds lead with $18 billion inflows in Q3

By Nell Mackenzie

LONDON, Oct 23 (Reuters) -

Global hedge fund capital rose to a record of almost $5

trillion in the third quarter and the number of hedge funds is

at a decade peak, reflecting an influx of new money into the

sector, a report by Hedge Fund Research (HFR) showed on

Thursday.

Global hedge funds numbered 8,464 as of the end of the

third quarter, said research firm HFR, which tracks hedge funds,

their returns and the size of the industry.

The growth coincides with an almost $34 billion of new

investor money allocated to hedge funds in the third quarter,

the highest quarterly net asset inflow since the third quarter

of 2007, said HFR's report.

Total global hedge fund industry capital rose for an eighth

consecutive quarter in the third quarter to a record $4.98

trillion, HFR said.

The number of new hedge funds and the size of existing

funds has grown sharply in recent years, with fund leverage

ratios hitting a five-year high earlier this year, Reuters

previously reported.

In the latest quarter, the largest U.S. banks led by

JPMorgan Chase ( JPM ), Goldman Sachs ( GS ), and Bank of

America ( BAC ) flagged big profits from the booming business of

prime brokerage, which involves lending cash and securities to

hedge funds to help execute large trades.

"The hedge fund industry has experienced historic growth and

performance in recent months," said HFR president Kenneth J.

Heinz in the note, adding the growth had been driven by a

combination of "powerful trends" including merger and

acquisitions and increasing cryptocurrency investment.

Investors such as pension funds, family offices and

sovereign wealth funds allocate portions of their portfolios to

hedge funds.

This brought the total year's new client inflows for the

year to $71 billion, the strongest year so far for inflows in

the first three quarters since 2014, said HFR.

Equity hedge funds saw the highest net amounts for the third

quarter, with a new $18 billion of flows, followed by relative

value hedge funds which trade the price of one financial asset

against another, the report said.

Net inflows are investment money from allocators and these

figures do not include the performance values of leveraged

trading assets which can rise and fall depending on market

performance.

(Nell Mackenzie; editing by Dhara Ranasinghe and Keith Weir)