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: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...