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Investors resist hedge fund exodus despite U.S. debt worries

Date: Monday, October 21, 2013
Author: Reuters

Requests to pull money out of hedge funds dropped by a fifth in October as investors shrugged off fears that U.S. politicians might fail to end a stalemate on how to tackle a ballooning debt crisis, data on Friday showed. SS&C GlobeOp's Forward Redemption Indicator (FRI), a monthly snapshot of hedge fund clients giving notice to withdraw their cash as a percentage of assets under administration, measured 3.36 percent in October, down from 4.21 percent in September. Until now, it was unclear whether investors would flee funds on concerns the U.S. government would reject a bill to raise its so-called "debt ceiling", and inflict significant damage on its status as one of the world's most creditworthy borrowers. The data, which captures around 10 percent of the global hedge fund industry, implies many investors chose to keep their stakes intact, leaving the October exit requests "in line with historical patterns", Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies, said in a statement. Redemption requests peaked at more than 19 percent in late 2008 following the collapse of Lehman Brothers. Levels have not topped 10 percent since September 2009. Reporting by Sinead Cruise. Editing by Chris Vellacott; editing by David Evans