Bermuda's fund business has become a quarter of a trillion dollar industry.

Assets held by the 1,315 investment funds based on the Island have soared over the past couple of years, according to the latest figures released by the Bermuda Monetary Authority (BMA).

Over the past three years, the total asset value of the Island's funds has risen steadily from $210.95 billion in the third quarter of 2006 to $249.88 billion in the first quarter of this year.

The biggest climb, according to the BMA's July Regulatory Update, came between the third quarter of 2007 at $230.54 billion to $249.17 billion in the fourth quarter.

The growth of fund management has boosted the Island's credentials as a financial centre, rather than purely an insurance hotspot. Earlier this month, Butterfield Fund Services and Fulcrum Group announced plans to join forces to create a Bermuda-based company expected to be in the top 10 alternative asset fund administration companies in the world.

The agreement to form Butterfield Fulcrum Group will create a company with close to $100 billion in assets under administration and around 400 employees in nine countries. Their clients already include nearly 1,000 hedge funds, fund of funds, private equity and institutional investment management clients.

The BMA figures also showed that Bermuda dollar bank loans and mortgages as the end of the first quarter stood at $4.4 billion, while deposits stood at $3.7 billion.

This represents a percentage of deposit liabilities lent of 118.7 percent, slightly down from the 120 percent recorded for last year's fourth quarter.

But lending was up from $4.36 billion for the last quarter of 2007, as were deposits held at $3.6 billion for the same period, while the gap for surplus deposits narrowed from $725 million to its current figure of $692 million for the year's first quarter.

The banks' total assets amounted to $25 billion, including $4.9 billion in Bermudian dollars, while liabilities were $24.9 billion, $5.6 billion of which were Bermudian dollars.

The report also showed that the total number of new Bermuda-based companies exempt from the 60-percent Bermudian ownership requirement fell significantly from 310 in the fourth quarter of last year to 243 for the following quarter.

The volume of local companies remained the same at 52 during the same time frame, but the overall number of companies, partnerships, permit companies and unit trusts was down by more than 150 from 515 in the fourth quarter of 2007 to 347 for the first quarter of this year.