December Hedge Fund Redemptions Lowest in a Decade

Stockholm (HedgeNordic) – Investor requests to pull money out of the hedge fund industry in the last month of 2017 reached the lowest figure in a decade, pointing to improved confidence in the so-called smart money industry.

According to SS&C GlobeOp’s Forward Redemption indicator, a widely-used metric that tracks the level of forward redemption notices received from hedge fund investors, clients’ requested withdrawals for December totaled 4.18% of the assets managed by the global hedge fund industry. The percentage was below the level of requested redemptions recorded for the same month in any of the last ten years. The month of December typically represents the time of the year associated with the highest volume of redemption requests, as investors review the performance of their investments and undergo rebalancing activities.

The 4.18% figure compares favorably with the 5.67% level of redemption requests recorded for December 2016. The worst December in terms of forward redemption notices was in 2008, when hedge funds faced heavy year-end outflows after the industry recorded its worst year on record. Hedge fund clients sought to withdraw 19.18% of hedge fund assets in December 2008.

Furthermore, the volume of full-year redemption notices in 2017 was the second-lowest in the ten years tracked by SS&C. “Clearly, the hedge fund industry will start 2018 with strong momentum in asset retention,” Bill Stone, Chairman and Chief Executive Officer of SS&C Technologies, was quoted in a press release.

Picture (c): shutterstock.com-Kesu