Hedge fund manager Man Group today declared that demand for its funds remains strong despite figures yesterday showing the industry had its worst first-half performance for 18 years.

Man chairman Jon Aisbitt said: "Demand for our fund products has remained strong, both from private investors and institutions."

Sales in its first quarter to the end of June were $5 billion (£2.53 billion) as investors looked for alternatives to the stock markets in which to put their cash.

Redemption rates - the pace at which investors pull out funds - eased in the quarter but were still running at $2.5 billion, more than half of it from private investors. Hedge funds saw huge redemptions at the end of last year and in the first quarter but punters now appear to be holding their nerve more.

Analysis firm Hedge Fund Research yesterday said hedge funds' performances declined by an average of 0.75% in the first half of the year.

Man's funds in the first quarter were up by between 1.7% and 3.8%.