New York State's main public pension fund is among the investors putting Diamondback Capital Management out of its misery.
The New York State Common Retirement Fund began redeeming is $252.3 million investment with Diamondback earlier this year. It was still in the process of pulling its money when Diamondback announced yesterday that it would close its doors after two years of declining assets.
Now, New York will have its money back next month.
According to the New York Post, the Empire State's move was an "investment decision" and not motivated by Diamondback's link to the government's insider-trading crackdown; two former employees of the firm have pleaded guilty and another is currently on trial for trading on non-public information.
Diamondback itself was never accused of any wrongdoing and earlier this year settled SEC allegations stemming from the trades of Todd Newman, the former portfolio manager who is currently on trial. But it couldn't stop the asset bleeding that began with the Federal Bureau of Investigation's raid in November 2010. While Diamondback, alone among the four hedge funds raided that month, soldiered on, its assets plunged from $5.8 billion to just $1.45 billion following another $520 million in recent redemptions.