SS&C GlobeOp: Forward Redemption Indicator Rises to 4.38%

The pace of hedge fund redemptions quickened in May despite relatively calm financial 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, rose to 4.38% in May 2016, up from 2.94% in April.

"Looking at the year over year comparison, SS&C GlobeOp's Forward Redemption Indicator for May 2016 was 4.38%, an improvement from the 4.68% seen a year ago for May 2015," said Bill Stone, chairman and CEO of SS&C Technologies. "So far in 2016, four of the first five monthly readings have come in lower than the corresponding months of 2015, indicating that investors continue to show confidence in their hedge fund allocations."

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.