Investors poured a record $127bn (€98bn) into hedge funds in 2006, almost three times more than in the previous year, according to a new report - however, the asset class is falling out of favour with the wealthiest Americans as fewer high-net-worth investors put money into hedge funds than in 2005.

Inflows tailed off to $16bn in the final three months of the year in the wake of the collapse of US manager Amaranth Advisors, according to data provider Hedge Fund Research, but even this was higher than the amounts raised in the final three months of the two previous years.