Hedge funds going into 2015 are looking to replicate a record year that saw the industry grow to about US$3 trillion assets under management (AUM). According to hedge fund data provider eVestment, the industry took in US$98.24 billion in 2014, the highest since 2007. In 2013, the industry received inflows of US$61.7 billion and US$24.9 billion in 2012. Fourth quarter 2014 flows, however, were negative for the industry with investors withdrawing US$13.2 billion from hedge funds in December.

It was the industry's first quarterly decline in six quarters. eVestment reported that end of the year outflows is likely a "seasonal factor" with most investors commonly redeeming their investments towards the year-end.

Funds invested in India stood out from the pack, returning on average 51.04% in 2014 compared to -7.01% in 2013. Because of the optimism of reform and growth following the election of Prime Minister Narendra Modi in late May 2014, many hedge funds have been able to consistently outperform the country's stock market. The S&P BSE Sensex was up 37.45% for 2014.

The country has also been a beacon of light for many emerging market focused hedge funds. Compared to India, funds investing in Brazil and Russia last year have been hit with losses of -16.18% and -51.04% respectively.

The aura that previously surrounded Brazil's 7.5% growth five years ago has all but vanished and now the country is predicted to grow 0.9% for 2014. In Russia, the combination of Western-backed sanctions and the fall of oil prices are beginning to take their toll on the country, leading to losses for funds involved there.

Despite the fear surrounding China's economic slowdown, hedge funds invested in the Asian giant have made a decent return of 6.15% for 2014. But this is a far cry from the 17.09% return reported in 2013.

Majority of hedge fund returns across all strategies have remained flat, earning on average returns of 2.22% for their investors. Those who followed the S&P 500 fared much better, as the index returned 13.69% to end 2014.

With the whole industry predicted to have US$90 billion-US$110 billion of new inflows for 2015, it will be interesting to see how long hedge funds can continue to make single digit returns yet receive large amounts of new funding.