Hedge Fund Redemptions Spike

Dec 21 2012 | 12:06pm ET

Hedge fund investors are voting with their feet in a big way this month.

Redemption requests hit a three-year high in December, according to SS&C GlobeOp's Forward Redemption Indicator. The withdrawal yardstick ticked up to 6.19% of assets under administration this month; it was 4.58% last December.

And while hedge funds' middling performance this year undoubtedly played a role, fears of a fiscal cliff and big tax hike on Jan. 1 may also be motivating redeemers.

"December is… the final chance to change your tax liability," SS&C Technologies CEO Bill Stone told Reuters. "People are generating the cash to be able to make their quarterly estimated payment. A lot of people are going to make tax-influenced decisions."


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