SS&C: Hedge Fund Inflows Reach 12-Month High in August

SS&C Technologies reported that hedge fund net subscriptions reached their highest level in 12 months in August, with the firm’s Capital Movement Index rising 0.92% to 132.34. The rise marked the seventh consecutive month of positive inflows and a 5.25-point gain over the past year.

The Capital Movement Index, compiled by SS&C GlobeOp, measures net subscriptions and redemptions across hedge funds administered on the firm’s platform relative to assets under administration. The index is calculated from actual capital movements processed through the platform and the August reading was 0.92 points higher than in July. SS&C said the figures are based on confirmed subscriptions and redemptions rather than investor intentions or surveys.

Bill Stone, chairman and chief executive of SS&C Technologies, described the market backdrop: “The combination of elevated inflation, geopolitical uncertainty and a shift in Federal Reserve policy is contributing to increased volatility.” Stone added that the market environment supports maintaining long-term allocations to hedge funds, particularly strategies that aim to produce returns with relatively low correlation to traditional asset classes.

The SS&C GlobeOp Hedge Fund Performance Index, an asset-weighted measure of aggregate returns across funds administered by GlobeOp, recorded a gross return of -2.93% for July. SS&C noted the figure is an initial estimate and that interim and final performance figures will be released over the following two months. The performance index, launched in 2006, is structured to avoid selection or survivorship bias and to prevent any single strategy from disproportionately affecting the aggregate result.

Since its launch, SS&C said the performance index has shown roughly a 25% to 30% correlation with major equity indices. SS&C GlobeOp said the Capital Movement Index data are based on confirmed capital movements processed through the platform and that the next update is scheduled for September 14.