Capital flows to emerging markets reached record levels last year as investors fled the US and other developed economies in search of higher yields and faster rates of economic growth, the Institute of International Finance said on Thursday.

The IIF said total flows to emerging markets reached an estimated $782.4bn (€508.9bn, £389.6bn) in 2007, a sharp rise from $568.2bn in 2006 and $521bn in 2005.