SAC Bracing For Huge Redemptions

May 23 2013 | 12:34pm ET

Facing possible criminal charges and mulling whether to return all outside money, SAC Capital Advisors could suffer even more redemptions next month than the $1.7 billion it saw pulled in February.

Withdrawals are expected to accelerate at next month's redemption date, the New York Post reports. SAC has again relaxed its policies, which normally permit investors to pull only a quarter of their money per calendar quarter; instead, investors who do not redeem next month will be permitted to pull half of their money in each of 2013's remaining quarters.

SAC has also pushed its redemption date, which was to be May 16, back to June 3.

The $15 billion hedge fund made the same move in February, but still saw some 70% more redemptions than it expected. At the time, it was battling only criminal cases against a former portfolio manager; now, prosecutors are considering insider-trading charges against the firm itself, possibly as a criminal organization, and firm founder Steven Cohen reportedly may offer to turn the firm into a family office in exchange for a deferred-prosecution agreement.

One major investor, the Blackstone Group, has stuck by SAC so far. But the alternative investments giant is pulling about half of the $550 million its clients have with SAC. And the firm is in talks with other investors, and may still make additional redemption requests, according to the Post.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

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.