SS&C GlobeOp: Forward Redemption Indicator Falls to 2.95%

Jul 22 2016 | 9:39pm ET

The pace of hedge fund redemptions lessened in July despite a relatively volatile month for global markets, according to the latest data from SS&C GlobeOp.

The SS&C GlobeOp Forward Redemption Indicator, a metric used to gauge investor withdrawals from hedge funds, measured 2.95% in July, down from 4.88% in June and 4.38% in May, the company noted. Year-over-year, it was up slightly. 

“SS&C GlobeOp’s Forward Redemption Indicator rose to 2.95% for July 2016, up from 2.08% reported a year ago for July 2015,” said Bill Stone, chairman and CEO of SS&C Technologies. “However, it’s worth noting with regard to this comparison that the prior year’s reported July number of 2.08% equaled the lowest of any month of July since the inception of the index.

"Even with this difficult comparison, on a year-to-date basis redemption notices in 2016 are running virtually identical to redemption notices in 2015,” Stone added.

The Forward Redemption indicator is published on the 15th business day of every month. It represents the sum of forward redemption notices received from investors in hedge funds administered on the SS&C GlobeOp platform, divided by assets under administration at the beginning of the month, and is useful in measuring the pipeline of hedge fund investors asking for their money back.

Decreases in the indicator generally reflect increasing confidence in hedge fund allocations, while increases suggest the opposite. The indicator reached a high of 19.27% in November 2008 and a low of 1.85% in January 2012.

Windsor, CT-based SS&C’s clients represent about 10% of assets invested in the hedge fund sector. Founded in 1986, the company provides investment and financial software-enabled services to more than 10,000 financial services organizations that manage an aggregate $44 trillion in assets.

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