Unhappy Valentine's Day As SAC Faces Redemptions

Feb 14 2013 | 2:15pm ET

SAC Capital Advisors will learn today just how many of its clients will jump ship in the face of an insider-trading scandal.

Investors have until today to file redemption notices with the firm. SAC said it expects about $1 billion of the $6 billion in outside capital it manages to be pulled. The hedge fund manages $14 billion in total.

SAC has expressed confidence that the redemptions wouldn't have a "significant impact on our funds," not only because the majority of its capital belongs to firm founder Steven Cohen and other SAC employees, but because clients can get only one-quarter of their redemption each quarter, meaning it will take a year for the firm to feel the full impact of the withdrawals.

Still, SAC has taken steps to further minimize the impact, opening its flagship hedge fund to new investors for the first time since July 2011.

It is possible that redemptions could top $1 billion: Wavering investors were greeted yesterday by news that a second SAC portfolio manager could be charged with insider-trading. Prosecutors are working to build a case against Michael Steinberg, a top technology manager who is close to Cohen, based in part on the cooperation of Steinberg's former analyst at SAC's Sigma Capital Management unit.

If Steinberg is indicted, he'll join former portfolio manager Mathew Martoma in the dock. Martoma faces unrelated insider-trading charges and has pleaded not guilty.


In Depth

Q&A: Executive Recruiter Talks Hedge Fund Closures, Hiring Trends

Dec 19 2014 | 6:58am ET

This year, hedge funds have been closing at a rate not seen since the financial...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Alternative Investment Funds Face A Communications Imperative

Dec 19 2014 | 6:10am ET

A handful of the top alternative investment firms on both sides of the Atlantic...

 

Sponsored Content

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

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

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.