AppId is over the quota
AppId is over the quota
By Tommy Wilkes
LONDON | Fri Oct 21, 2011 9:21am BST
LONDON (Reuters) - Investors are largely looking beyond hedge funds' recent poor performance and sticking with their investments, as volatile markets leave few safe havens for clients to put their cash, data showed on Thursday.
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 administration -- dropped to 2.51 percent in October from 3.11 percent in September.
This makes October the month with the third-lowest level of redemption requests in 2011, though it also represents a rise on the same month last year -- the first year-on-year increase in redemptions since 2009.
"Forward hedge fund redemptions continue to be low on a historic basis," Hans Hufschmid, chief executive of GlobeOp Financial Services, which provides back- and middle-office help to hedge funds.
"Reflecting seasonality, November and December indicate substantially lower redemptions than October."
Redemption notices reached a high of 19.27 percent in November 2008, shortly after the collapse of Lehman Brothers, but have since trended lower as investors back hedge funds to help them ride out some of the most volatile stock and bond markets since 2008.
Many hedge funds have fallen sharply this year, with popular strategies such as equity long-short and commodity-focused funds among those suffering the most.
Hedge Fund Research's HFRI Fund Weighted Composite Index shed 4.74 percent from the end of 2010 to September 30, with the last quarter the fourth-worst on record for hedge fund performance.
Investor withdrawals from hedge funds jumped last month.
Gross outflows, as measured by the GlobeOp Capital Movement Index, which tracks monthly net subscriptions and redemptions from hedge funds running around $170 billion (107.7 billion pounds) of assets, hit 3.17 percent last month, the fourth time gross exits topped 3 percent in 2011.
The bulk of the redemption requests in October were for two-to-three month requests, reflecting how many investors are likely preparing to re-allocate money at year-end.
(Editing by David Holmes)
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