Hedge fund exit requests lower than year ago-GlobeOp

Date: Monday, June 25, 2012
Author: Laurence Fletcher, Reuters

* Exit requests rise to 3.71 pct in June from 3.31 pct in May

* Requests lower than in June of previous four years

* Hedge funds in positive territory so far this year

LONDON, June 22 (Reuters) - Client demands to pull money out of hedge funds remained relatively subdued in June, data shows, in a sign that investors are still backing these freewheeling portfolios to guide them through the financial crisis.

The GlobeOp Forward Redemption Indicator, a monthly snapshot of clients giving notice to withdraw their cash as a percentage of GlobeOp's assets under administration, measured 3.71 percent in June.

While this was up from 3.31 percent in May and the highest level so far this year, redemption requests tend to be higher at the end of the quarter and particularly in June, ahead of July 1 redemptions, and December.

The figure was below the levels seen in the June of any of the past four years.

"It's a pretty solid number, there's not a whole lot of money coming out," said GlobeOp CEO Hans Hufschmid.

"A well-diversified portfolio of hedge funds is not a bad place to be, particularly with uncertainty in equity markets and the situation in Europe, while in fixed income you essentially don't get any yield at all."

Hedge funds are in positive territory in 2012 after a rally early on in the year, although gains have been eroded by recent market volatility as fears over the euro zone's debt crisis have grown.

According to the GlobeOp Hedge Fund Performance Index funds have gained 4.15 percent in the five months to May. However, the average hedge fund is up just 1.25 percent to June 20 after losing further ground this month, according to rival data provider Hedge Fund Research.

GlobeOp's data covers around $187 billion of hedge fund assets under administration, or around 8 to 10 percent of the global hedge fund industry.

The GlobeOp Forward Redemption Indicator hit an all-time high of 19.27 percent in November 2008 in the wake of the collapse of U.S. investment bank Lehman Brothers, but has not risen above 10 percent since September 2009.