Diamondback Redemptions Top $1 Billion

Feb 16 2011 | 3:57am ET

Things aren’t as rosy at Diamondback Capital Management as the hedge fund indicated last week.

Investors have filed redemption notices totaling more than $1 billion with the firm, one of four raided in November by the Federal Bureau of Investigation as part of the Justice Department’s massive insider-trading probe. Diamondback has not been accused of any wrongdoing.

The withdrawal requests, first reported by The New York Times, are about twice the amount the firm reported to investors last week, indicating that its efforts to reassure did not go as well as Greenwich, Conn.-based Diamondback had hoped. Later last week, the firm acknowledged that redemption notices had crested $700 million; the final total is likely to be higher, as the deadline for notices was yesterday at 5 p.m.

Diamondback, which manages about $5.5 billion, had told investors last week that “several large investors” would stick with the firm. That includes that Blackstone Group, the hedge fund’s largest investor, which does not plan to substantially alter its investment with Diamondback.

The hedge fund also warned investors to think long and hard about their decision: Unlike most of its peers, Diamondback said it will not allow investors to revoke their redemption requests. It is unclear if the ballooning level of withdrawal demands will lead it to change that stance.


In Depth

Fundraising for Mid-Sized PE Funds: Should You Use a Registered B/D?

Dec 6 2016 | 7:18pm ET

When does a fund sponsor need to use a registered broker/dealer when raising capital...

Lifestyle

Trump Attends 'Villains and Heroes' Costume Party Dressed As...Himself

Dec 5 2016 | 11:16pm ET

U.S. President-elect Donald Trump attended a "Villains and Heroes" costume party...

Guest Contributor

A Hard Look At Your ‘Soft’ Hedge Fund Marketing Information

Dec 8 2016 | 9:03pm ET

Conventional wisdom holds that due diligence examines quantitative as well as qualitative...

 

From the current issue of

Since the inception of Modern Trader, a core editorial theme has centered on the wisdom and power of crowds. Editorial emphasis has focused on companies and projects engaged in the collection and analysis of information. 

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR