Hedge fund exits surge in June as investors pause for review

City A.M. Reporter
REQUESTS to pull money out of hedge funds rose in June as investors used the mid-year point to review their portfolios and release cash to spend elsewhere.

Hedge fund administrator SS&C GlobeOp’s forward redemption indicator – a monthly snapshot of clients giving notice to withdraw their cash which shows the percentage of assets under administration – stood at 3.88 per cent in June, a moderate rise from May’s measurement of 3.77 per cent.

Chief executive at SS&C Technologies Bill Stone described the June increase as “typical semi-annual redemption activity”, such as investors freeing up cash to spend on summer holidays.

Hedge funds have profited from a sharp rally in financial markets since last summer, but some investors are disappointed that many hedge funds have failed to match equity markets.

So far this year, hedge funds have returned 3.95 per cent according to Hedge Fund Research, compared with a gain of almost 13 per cent from the S&P 500.

Stone said speculation that central banks like the Federal Reserve would scale down their asset purchasing programmes, could impact hedge funds because investors were hanging on to their cash until a decision was made.