The hedge fund industry, it seems, has come out of intensive care and is doing laps around the block again.

After last year’s turmoil, funds are seeing assets flow back, performance pick up and confidence return.

Polar Capital joined the jogging party with net sales of $248 million in the three months to September, more than cancelling out of the net outflows in the previous three months and helping lift assets by 28 percent over the six months. Both the hedge funds and the long-only funds are seeing net inflows.

Meanwhile performance and currency movements have also boosted assets. Hedge fund may still try to sell themselves as a means to smooth the market’s wrinkles, but performance tends to reflect overall movements in equity and credit markets and in turn, sales tend to follow performance.

Polar had pointed to a change in sentiment in its last update, and today felt confident enough to say it is “reasonably comfortable that … continued strong relative and absolute performance should result in a more extended period of investor inflows”.

Should the economy follow the dreaded W-shaped recovery and markets head south, then hedge fund returns — at least on an aggregated basis — are likely to follow and investor money will head back out the door.

But then why dwell on the potential relapse round the corner just when the industry is once more in rude health?