More hedge funds were launched last year than in any 12 months since 2017, with 614 added, as the industry posted double-digit returns, according to a report released by HFR on Friday.

Hedge funds and funds of funds totaled 9,254 in 2021, roughly stable from the previous year. While 527 were liquidated, HFR said this was the fewest since 2004, as hedge funds performed well amid rising inflation and interest rates.

Hedge funds assets reached $4 trillion for the first time in December, with returns of 10.2% in the year, according to a fund weighted composite index.

The HFRI Equity Hedge Index rose 11.96% last year, compared to a 26.89% gain for the S&P 500 index.

HFR President Kenneth J Heinz said in a statement the industry is likely to attract investors through mid-2022 as macro strategies have helped to create returns despite high volatility this year.

"Strong growth trends continue to be driven by rising geopolitical and macroeconomic uncertainty, with institutional investors positioning for this uncertainty and looking for portfolio capital protections," he said.

For the first two months of 2022, macro funds posted a total 2.88% gain, while the fund weighted composite index for the entire industry was down 1.43%, according to the HFRI Macro Index.