SS&C GlobeOp: Forward Redemption Indicator Rises To 3.72%

Sep 22 2017 | 8:10pm ET

Hedge fund redemptions rose slightly in September after accelerating in August, according to new data from fund administrator SS&C GlobeOp, although they were again down from year-ago levels. 

The company’s widely-followed Forward Redemption Indicator, a metric used to gauge investor withdrawals from hedge funds, for the August period was 3.72%, up from 3.55% seen in August. 

“SS&C’s Forward Redemption Indicator for September 2017 fell to 3.72% as compared to the 4.22% reported for the same period a year ago in September 2016,” said Bill Stone, CEO of SS&C Technologies, in a statement. “This decline marks the eighth consecutive month of year-over-year improvement in redemption notices. 

“It’s noteworthy that these gains in asset retention have been made in a year of generally bullish financial market performance,” Stone continued, “indicating that investors are confident that hedge fund managers can deliver value-added even in strongly directional markets.”

SS&C GlobeOp's 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 11,000 financial services organizations that manage an aggregate $44 trillion in assets.

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