After seeing their 2006 gains wiped out in one fell swoop, investors are increasingly dumping their investments in European long/short equity hedge funds for the first time in three years, according to TARA Capital. In its latest quarterly survey, TARA found that 22% of European HF investors are pulling out of long/short equities, while 11% plan to add to them, and 67% planning to maintain their current investments. Investors are evenly split in their comings and goings in U.S. long/shorts, but when it comes to global long/short, 39% intend to increase their allocations, while no one said they were cutting them. The new hedge fund darling appears to be multi-strategy funds, with 44% of respondents saying they were expecting to make new investments, followed by distressed strategies, which has caught the eye of about 33% of investors. That’s a major reversal from the previous four surveys, when investors said they were cutting their allocations to the strategy.