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Forward redemption notices on the up in May

Date: Tuesday, May 24, 2011
Author: Wendy Chothia, HedgeWeek

Hedge fund forward redemption notices increased slightly in May according to the latest results issued by one of the industry's major indicators.

The GlobeOp Forward Redemption Indicator for May 2011 recorded a modest increase to 3.92%, up from 2.45% in April but lower than the 4.25% from a year ago.
“Although the indicator increased in May there is no reason to believe that this signals a change in investor sentiment,” says Hans Hufschmid (pictured), chief executive officer, GlobeOp Financial Services.
The Indicator represents the sum of forward redemption notices received from investors in hedge funds administered by GlobeOp, divided by the AuA at the beginning of the month for GlobeOp fund administration clients. Forward redemptions as a percentage of GlobeOp assets under administration have trended significantly lower since reaching a high of 19.27% in November 2008. The next publication date is June 21, 2011.
Published on the 15th business day of the month, the GlobeOp Forward Redemption Indicator presents a timely and accurate view of the redemption pipeline for investors in hedge funds on the GlobeOp administration platform. Movements in the Indicator reflect investor confidence in their allocations to hedge funds. Indicator data is based on actual investor redemption notifications received. Unlike subscriptions, redemption notifications are typically received 30-90 days in advance of the redemption date. Investors may, and sometimes do, cancel redemption notices. In addition, the establishment and enforcement of redemption notices may vary from fund to fund.