Wednesday, 30 July 2014
Last updated 10 hours ago
Jan 9 2013 | 1:22pm ET
SAC Capital Advisors isn't worried only about holding on to investors.
The $14 billion hedge fund, which finds itself fending off potentially massive redemptions as it struggles with an insider-trading scandal, may be having trouble holding on to its staff, as well. The firm has increased bonuses for portfolio managers by 3%, Bloomberg News reports.
"The program is intended to retain our most valuable resource, our investment professionals," spokesman Jonathan Gasthalter said.
The raise covers SAC's stock, macro and commodity managers. Typically, SAC portfolio managers receive bonuses of between 15% and 25% of the profits they generate for the firm's investors.
SAC's International Fund returned about 12% last year.
Word of the increased bonuses comes just a day after Fox Business Network reported that SAC is "scrambling" to head off huge redemptions. The hedge fund has reportedly assured investors that it does not expect founder Steven Cohen, known to be especially hard on his staff, to be indicted, and that a large fine is more likely.
Outside clients account for only 40% of SAC's assets, and investors can redeem only a quarter of the investment at a time. Redemption notices are due next month.
The raises follow the indictment of former SAC portfolio manager Mathew Martoma for insider trading and a Wells notice from the Securities and Exchange Commission, indicating that SAC is likely to face an enforcement action.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…