Citi To Redeem $187 Million From SAC

Jan 24 2013 | 12:28pm ET

Citigroup is dropping SAC Capital Advisors from its hedge fund platform, a move that will cost the embattled hedge fund $187 million.

The word from Citi Private Bank comes as SAC braces for more than $1 billion in expected redemptions next month. The firm is facing legal and regulatory scrutiny for alleged insider-trading; a former portfolio manager, Mathew Martoma, has been charged with illegally earning the firm $276 million, and the Securities and Exchange Commission is preparing a lawsuit against SAC. Firm founder Steven Cohen is thought to be the ultimate target of the probe.

Citi said its decision "should not be construed as a statement on the merits of any outstanding legal proceedings or potential regulatory action."

In a statement to The Wall Street Journal, Citi added, "in the event these legal and regulatory matters are resolved favorably for Mr. Martoma and SAC, Citi Private Bank expects to reconsider admission of SAC's fund to its hedge fund platform."

Citi's decision to pull follows similar moves by fund of hedge funds Titan Advisors and Société Générale's Lyxor Asset Management. Morgan Stanley, which like Citi put SAC on watch last month, continues to monitor the firm.

The $187 billion Citi clients have with SAC represents nearly 10% of the assets invested with its HedgeForum platform.

SAC, which has denied any wrongdoing in the insider-trading investigation, is moving aggressively to limit redemptions and lure new investors, as well as to hold on to staff.


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Griffin Selling Chicago Apartment

Nov 26 2014 | 11:40am ET

Citadel Investment Group’s Kenneth Griffin is making clear to his estranged wife...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.