FRI Levels Affected by Cyprus Meltdown

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According to the SS&C GlobeOp's Forward Redemption Indicator, client pullout of money from hedge funds is expected to rise further as investors grow antsy about the debt crisis in Cyprus. The indicator is a snapshot of clients providing notice of cash withdrawals as a percentage of assets under management.

The current levels is at 4.33% in March alone and this is double the level in January 2013 and well above the 3.23% seen in 2012.

According to Bill Stone, SS&C Technologies Chairman and CEO said, "There's been volatility in markets, so you're going to see fund redemptions correlated with what's happening there. Cyprus has had an impact on short-term thinking." With this, he is expecting a higher figure for next month's FRI.

The current figures though are not in the same time zone as experienced during the late 2008 crisis, where rates were seen at 19% especially after the collapse of the Lehman Brothers investment bank. Since September 2009, reported levels have not gone beyond 10%.

Tags
Debt crisis, Lehman Brothers

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