SS&C GlobeOp: Forward Redemption Indicator Dips To 2.69%

Oct 20 2017 | 10:36pm ET

The pace of hedge fund redemptions lessened in October after rising in September, according to new data from fund administrator SS&C GlobeOp, and they remained below year-ago levels for the ninth consecutive month. 

The company’s widely-followed Forward Redemption Indicator, a metric used to gauge investor withdrawals from hedge funds, for the October period was 2.69%, down from the 3.72% seen in August. 

“SS&C GlobeOp’s Forward Redemption Indicator of 2.69% for October 2017 reflects improved levels of redemption notices as compared to the 3.40% reported a year ago for October, 2016,” said Bill Stone, CEO of SS&C Technologies, in a statement. “This marks the ninth consecutive month of lower year-over-year comparisons for redemption notices, as well as the lowest reading for the month of October since 2011. 

“The strength of this positive trend in asset retention indicates a high degree of confidence on the part of investors in their hedge fund allocations,” he added. 

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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