SS&C GlobeOp: Forward Redemption Indicator Falls to 3.40%

Oct 21 2016 | 3:41pm ET

Amid industry reports that hedge fund redemptions in the third quarter were at the highest level since the financial crisis, new data from SS&C GlobeOp suggests the pace going forward may be a bit slower. 

The SS&C GlobeOp Forward Redemption Indicator, a metric used to gauge investor withdrawals from hedge funds, measured 3.40% in October, versus 4.22% in September, and 3.86% in August. 

"SS&C GlobeOp's Forward Redemption Indicator for October of 2016 was 3.40%, an increase of 44 basis points from the 2.96% reported a year ago for October of 2015," said said Bill Stone, chairman and CEO of SS&C Technologies.  "Nearly all of the increase in October consisted of redemptions targeted around year-end, suggesting the increase is due to rebalancing activity. We will be watching our Capital Movement Index closely over the next few months to see how much of this rebalancing activity will cycle money back to hedge funds, versus to other types of managers."

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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