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Investors depart Stone Ridge interval fund

Stone Ridge Asset Management has been forced once again to ration redemptions from its loss-hit interval fund after being inundated with requests at the latest exit deadline.

The most recent window for redemption requests from the sidecar Reinsurance Risk Premium Interval Fund closed on Friday 22 February. According to sources, Stone Ridge raised the percentage of the fund they would agree to repurchase from 5 percent to 6 percent.

The fund gave investors around a quarter of the sums requested, indicating redemption requests neared a quarter of the fund’s share base this time round.

This was up on the previous redemption at the end of 2018 when Trading Risk reported that investors sought to redeem 15 percent of the fund’s share base.

With the fund only obliged to repurchase 5 percent, investors received a pro-rata payout of just over a third of the sums requested at that time.

Investors may have asked for more than they wanted at the most recent deadline to make sure they got what they wanted, given withdrawals from the fund were restricted in November, sources said.

Trading Risk also understands that Stone Ridge has had $2.1bn of inflows in the year to date across the firm, with some going into reinsurance funds.

An investment associate from a firm that had sought to redeem its holding from the fund told Trading Risk that it did so in order to invest in more liquid securities.

“We didn’t think we were getting the premium we deserved for being in an interval fund,” the associate explained.

However, some investors canvassed by Trading Risk stated that they were sticking with Stone Ridge.

Larry Swedroe, director of research at Buckingham Strategic Wealth, said he had increased his allocation with the asset manager.

“The thing I like about Stone Ridge’s product is they are buying quota shares which means you are pari passu with the players they are participating with.”

In last year’s annual report, Stone Ridge declared a 0.1 percent gain for the year to 31 October 2018 within its Reinsurance Risk Premium Interval Fund.

Stone Ridge declined to comment.

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