Investors submitted redemption notices equivalent to 1.64% of assets managed by hedge funds on SS&C GlobeOp’s administration platform in August, up from 1.35% in July but still well below the long-term average.
The latest reading from SS&C Technologies’ Forward Redemption Indicator was 73 basis points below its five-year average of 2.37%, suggesting investors remain relatively committed to their hedge fund allocations despite ongoing market uncertainty.
The indicator tracks forward redemption notices received from investors in hedge funds administered by SS&C GlobeOp, measured against assets under administration at the start of the month.
Bill Stone, chairman and chief executive of SS&C Technologies, said the latest figure showed hedge funds continued to offer diversification and downside protection as investors navigated volatile markets.
“Energy security concerns from ongoing conflicts, the unwinding of tariffs, fiscal challenges, and changes in rate policy continue to drive markets,” Stone said.
The August figure remains a long way below the record 19.27% redemption level recorded in November 2008 during the global financial crisis.
SS&C GlobeOp publishes the indicator on the 15th business day of each month, providing a measure of the pipeline of potential investor withdrawals from hedge funds on its platform.
Unlike subscription activity, redemption notices are generally submitted 30 to 90 days ahead of the actual redemption date. Investors can subsequently cancel those notices, while redemption terms and enforcement vary between funds.
The latest data therefore provides an indication of investor sentiment towards hedge funds, although it does not necessarily translate directly into realised outflows.
SS&C GlobeOp is due to publish its September indicator on 22 September.
