Hope for hedge funds as client redemptions fall to a new low

City A.M. Reporter
REDEMPTION requests by hedge fund clients have fallen to the lowest monthly level on record as improving market sentiment combined with a typical seasonal lull in asset re-allocation, data shows.

The GlobeOp Forward Redemption Indicator, a monthly snapshot of clients giving notice to withdraw their cash as a percentage of GlobeOp’s assets under administration, measured 1.85 per cent in the January report, down from 4.58 per cent in the December report, which shows requests to redeem funds in January, which is typically a period of heavy re-allocation.

That is the lowest recorded since the January report in 2008, when GlobeOp began compiling the index.

January report notifications were also substantially lower than the same time last year, when requests stood at 2.79 per cent.

GlobeOp’s data covers around eight to 10 per cent of the global hedge fund industry. The GlobeOp Forward Redemption Indicator hit an all-time high of 19.27 per cent in November 2008 in the wake of the collapse of US investment bank Lehman Brothers. Its previous all-time low of 2.08 per cent was recorded in July 2011.