AppId is over the quota
AppId is over the quota
By Sinead Cruise
LONDON | Wed Sep 21, 2011 11:55am BST
LONDON (Reuters) - Investors are broadly keeping faith with their allocations to hedge funds, data showed on Wednesday, as global markets brace for more turbulence in a final quarter seen likely to punish those unable to offset risk or exploit opportunity.
The GlobeOp Forward Redemption Indicator - a monthly snapshot of clients giving notice they want their money back as a percentage of GlobeOp's assets under adminstration - rose 40 basis points to 3.11 percent in September but the rate of growth in demand to pull out cash is slowing, the index showed.
"September 2011 was the lowest September since the Index began," said Hans Hufschmid, chief executive officer at London-listed GlobeOp Financial Services. "Investor sentiment continues to be positive," he said.
Investors representing 2.71 percent of GlobeOp's assets under administration requested their money back in August, reflecting a rise in redemption demand of 63 basis points against July's data.
Redemption notices hit a high of 19.27 percent in November 2008 shortly after the collapse of Lehman Brothers but since have trended lower as investors back hedge funds to help them ride out some of the most volatile stock and bond markets since 2008.
Hedge fund returns have proved a mixed bag in recent months.
While several long/short equity strategies were hit hard by sharp share price falls in August, some macro and computer-driven "black box" funds, like Man Group's (EMG.L) AHL, have made money even as volatility spread to the safest of asset classes.
The average fund was down 1.2 percent for the year to the end of August, according to Hedge Fund Research's HFRI index, though this still beats a 3.1 percent fall in the S&P 500 index.
Earlier this month, GlobeOp's Capital Movement Index, which tracks flows to and from its clients' products, showed gross outflows had dropped to 0.57 percent -- their lowest level since GlobeOp started to keep records in January 2006.
GlobeOp President Vernon Barback suggested hedge fund investors spooked by the instability of traditional safe havens like gold or the Swiss franc appeared "to be quite comfortable staying put".
GlobeOp is an independent financial administrator specializing in middle and back office services and integrated risk reporting to hedge funds and asset management firms.
Established in 2000, the company serves more than 200 clients representing $170 billion in assets under administration and approximately eight to 10 percent of the estimated assets currently invested in the hedge fund sector.
(Additional reporting by Tommy Wilkes; Editing by Jon Loades-Carter)
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