Investor demand to take money out of hedge funds more than halved in January compared with the previous month, data on Friday showed, suggesting that market volatility has made the asset class more attractive.

SS&C GlobeOp Forward Redemption Indicator, a measure of withdrawal requests as a percentage of assets under administration, fell to 2.31 percent from December's 4.98 percent, according to data from leading administrator SS&C Technologies.

The fall in redemption requests in January comes as stock markets around the world have fallen sharply since the start of the year.

The index is based on data provided by its clients and represents about 10 percent of assets invested in the hedge fund sector globally.

Year on year the gauge has fallen in seven of the past eight months, said Bill Stone, chairman and chief executive officer, SS&C Technologies.

"This continuing pattern is consistent with other data we track, indicating investors are confident that hedge funds can deliver attractive returns, particularly in highly volatile markets," he said.