Wednesday, 22 February 2017
Last updated 1 hour ago
May 28 2013 | 3:00pm ET
The Blackstone Group is posed to redeem all of the $550 million it has invested with SAC Capital Advisors, which is facing possible criminal charges for insider trading.
Blackstone has notified SAC that it intends to "fully redeem" a significant portion of the money its clients have with the hedge fund, through both funds of hedge funds and separately managed accounts, Russell Investments wrote to clients last week. Russell said Blackstone plans to fully redeem its funds of funds' investments, and is in talks with clients about the money in managed accounts. Russell said Blackstone "expects to receive 100% of investors' capital by year-end."
Russell's letter was reviewed by Reuters.
It is unclear how much of the Blackstone money comes from funds of funds and how much from managed accounts. But Blackstone accounts for nearly 8% of SAC's remaining outside capital, roughly $7 billion of its $15 billion in assets.
According to the letter, Blackstone submitted its redemption requests before May 15, well in advance of the delayed deadline for withdrawal requests early next month. Earlier reports indicated that the firm planned to redeem at least half of the $550 million.
Blackstone, which had previously taken a wait-and-see attitude towards the probe into SAC is redeeming due to the investigation, Russell said.
SAC is preparing for another avalanche of redemptions; the firm suffered $1.7 billion in withdrawals in February despite efforts to ease terms for clients. Those redemptions came before reports that SAC itself might face criminal charges.
The hedge fund is now reportedly considering life without client capital, and is drawing up plans to become a family office managing founder Steven Cohen's money exclusively.