SAC Boosts Bonuses To Retain Traders

Jan 9 2013 | 2:22pm 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.


In Depth

Q&A: Old Hill's Stone On Private Debt, P2P And Credit Bubbles

Jun 6 2017 | 7:52pm ET

While institutional capital continues to flow into the broader private debt sector...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Steinbrugge: Asia-Focused Hedge Funds Offer Great Opportunities

Jun 23 2017 | 3:33pm ET

Emerging market strategies have outperformed their developed-market peers for five...

 

From the current issue of