SS&C GlobeOp Forward Redemption Indicator

Rhea-AI Summary

SS&C Technologies Holdings, Inc. announced that the SS&C GlobeOp Forward Redemption Indicator for January 2023 measured 2.03%, down from 3.64% in November. The Indicator represents the sum of forward redemption notices received from investors in hedge funds administered by SS&C GlobeOp on the SS&C GlobeOp platform, divided by the AuA at the beginning of the month for SS&C GlobeOp fund administration clients on the SS&C GlobeOp platform. Bill Stone, Chairman and Chief Executive Officer, stated that the low level of redemptions suggests investors are confident hedge fund managers can continue to generate favorable risk-adjusted returns.

Insights

Financial Analyst

The SS&C GlobeOp Forward Redemption Indicator is a significant metric for gauging investor sentiment within the hedge fund industry. A decline to 2.03% from the previous 3.64% suggests a decrease in investor intent to withdraw their capital, which can be interpreted as increased confidence in hedge funds' ability to manage market volatility and generate returns. This is especially pertinent given the current economic context of central bank interest rate policies and inflation concerns.

From a financial perspective, this indicator provides insights into potential capital flows and stability within the hedge fund sector. A lower redemption rate could imply reduced cash outflow pressures for hedge funds, potentially allowing for more strategic long-term investments. This stability can be attractive to investors looking for signs of a robust investment environment amid market highs. However, it's important to consider that redemption rates are just one piece of the puzzle and comprehensive due diligence should include analysis of performance metrics, management quality and broader market trends.

Market Research Analyst

In the context of market trends, the reported redemption rate aligns with historical averages, indicating no significant deviation from established investor behaviors. This steadiness is noteworthy against the backdrop of the U.S. equity markets nearing record levels, which could have prompted higher redemptions due to profit-taking or rebalancing strategies. It appears investors are maintaining their hedge fund positions, likely due to a belief in the funds' strategies and management despite potential market headwinds.

Furthermore, the SS&C GlobeOp Hedge Fund Performance Index and Capital Movement Index provide a broader view of the industry's health. The reported year-to-date and life-to-date performance figures suggest that hedge funds, on average, have been successful in capitalizing on market conditions post-2005. The Capital Movement Index's historical highs and lows offer additional context on investor commitment and confidence over time, which can be a valuable reference for market analysts tracking capital allocation trends.

Economist

The Forward Redemption Indicator's current level suggests that macroeconomic factors, such as central bank interest rate policies and inflation trajectories, are not triggering a flight from hedge funds. This could be indicative of a broader economic environment where investors are searching for yield in alternative investments, especially in a potentially low-interest-rate world. It is also a signal that investors may expect hedge funds to navigate through any upcoming economic challenges, such as a possible recession, without significant losses.

However, it is essential to recognize that the economic implications of these indicators can be complex. For example, sustained low redemption rates might reflect a lack of liquidity in other market segments, prompting investors to stay put. Alternatively, it could suggest that investors have few better options for their capital, implying a cautious or risk-averse stance towards the broader market. Analyzing these indicators in conjunction with other economic data points is crucial for a comprehensive understanding of the investment landscape.

SS&C GlobeOp Forward Redemption Indicator: January notifications 2.03%

WINDSOR, Conn., Jan. 23, 2024 /PRNewswire/ -- SS&C Technologies Holdings, Inc. (Nasdaq: SSNC) today announced that the SS&C GlobeOp Forward Redemption Indicator for January 2023 measured 2.03%, down from 3.64% in November.

"SS&C GlobeOp's Forward Redemption Indicator for January 2024 was 2.03%, which was consistent with the five-year average for the period," said Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies. "Central bank interest rate policies and a path to lower inflation while avoiding a recession are front of mind for investors. With U.S. equity markets approaching all-time highs, this low level of redemptions suggests investors are confident hedge fund managers can continue to generate favorable risk-adjusted returns."

The SS&C GlobeOp Forward Redemption Indicator represents the sum of forward redemption notices received from investors in hedge funds administered by SS&C GlobeOp on the SS&C GlobeOp platform, divided by the AuA at the beginning of the month for SS&C GlobeOp fund administration clients on the SS&C GlobeOp platform. Forward redemptions as a percentage of SS&C GlobeOp's assets under administration on the SS&C GlobeOp platform have trended significantly lower since reaching a high of 19.27% in November 2008. The next publication date is February 22, 2024.

Published on the 15th business day of the month, the SS&C GlobeOp Forward Redemption Indicator presents a timely and accurate view of the redemption pipeline for investors in hedge funds on the SS&C 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.

SS&C GlobeOp Hedge Fund Performance Index 

Base	100 points on 31 December 2005
Flash estimate (current month)	2.14%*
Year-to-date (YTD)	8.52%*
Last 12 month (LTM)	8.52%*
Life to date (LTD)	250.01%*
*All numbers reported above are gross

SS&C GlobeOp Capital Movement Index 

Base	100 points on 31 December 2005
All time high	150.77 in September 2013
All time low	99.67 in January 2006
12-month high	130.54  in March 2023
12-month low	124.80 in January 2024
Largest monthly change	- 15.21 in January 2009

SS&C GlobeOp Forward Redemption Indicator        

All time high	19.27% in November 2008
All time low	1.48% in April 2022
12-month high	3.64% in December 2023
12-month low	1.82% in July 2023
Largest monthly change	9.60% in November 2008

About the SS&C GlobeOp Hedge Fund Index®

The SS&C GlobeOp Hedge Fund Index (the Index) is a family of indices published by SS&C GlobeOp. A unique set of indices by a hedge fund administrator, it offers clients, investors and the overall market a welcome transparency on liquidity, investor sentiment and performance. The Index is based on a significant platform of diverse and representative assets.

The SS&C GlobeOp Hedge Fund Index is available at www.sscglobeopindex.com.

The SS&C GlobeOp Capital Movement Index and the SS&C GlobeOp Forward Redemption Indicator provide monthly reports based on actual and anticipated capital movement data independently collected from all hedge fund clients for whom SS&C GlobeOp provides administration services on the SS&C GlobeOp platform.

The SS&C GlobeOp Hedge Fund Performance Index is an asset-weighted benchmark of the aggregate performance of funds for which SS&C GlobeOp provides monthly administration services on the SS&C GlobeOp platform. Flash estimate, interim and final values are provided, in each of three months respectively, following each business month-end.

While individual fund data is anonymized by aggregation, the SS&C GlobeOp Hedge Fund Index data will be based on the same reconciled fund data that SS&C GlobeOp uses to produce fund net asset values (NAV). Funds acquired through the acquisition of Citi Alternative Investor Services are integrated into the index suite starting with the January 2017 reporting periods. SS&C GlobeOp's total assets under administration on the SS&C GlobeOp platform represent approximately 10% of the estimated assets currently invested in the hedge fund sector. The investment strategies of the funds in the indices span a representative industry sample. Data for middle and back office clients who are not fund administration clients is not included in the Index, but is included in the Company's results announcement figures.

About SS&C Technologies

SS&C is a global provider of services and software for the financial services and healthcare industries. Founded in 1986, SS&C is headquartered in Windsor, Connecticut, and has offices around the world. Some 20,000 financial services and healthcare organizations, from the world's largest companies to small and mid-market firms, rely on SS&C for expertise, scale and technology.

Additional information about SS&C (Nasdaq: SSNC) is available at www.ssctech.com.

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SOURCE: SS&C

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SOURCE SS&C

FAQ

What is the SS&C GlobeOp Forward Redemption Indicator for January 2023?

The SS&C GlobeOp Forward Redemption Indicator for January 2023 measured 2.03%, down from 3.64% in November.

What does the SS&C GlobeOp Forward Redemption Indicator represent?

The Indicator represents the sum of forward redemption notices received from investors in hedge funds administered by SS&C GlobeOp on the SS&C GlobeOp platform, divided by the AuA at the beginning of the month for SS&C GlobeOp fund administration clients on the SS&C GlobeOp platform.

Who is Bill Stone?

Bill Stone is the Chairman and Chief Executive Officer of SS&C Technologies Holdings, Inc.

What does a low level of redemptions suggest about investor confidence?

A low level of redemptions suggests investors are confident hedge fund managers can continue to generate favorable risk-adjusted returns.