No Word From SAC On Redemptions

Jun 5 2013 | 10:58am ET

Two days after its redemption date, it remains unclear how much SAC Capital Advisors will have to pay out to investors.

Investors had until Monday to file redemption notices with the embattled hedge fund, which is under an insider-trading cloud. SAC reportedly expects to suffer about $3.5 billion in withdrawals, the lion's share of its remaining outside capital, thought to be between $5 billion and $6 billion.

But some reports indicate that SAC could be left with little outside capital, less than $1 billion, compared to the $9 billion held by firm founder Steven Cohen and SAC employees. Fox Business' Charles Gasparino reported yesterday that SAC could face "almost $4 billion" in redemptions.

It is not clear when the total damage will be known: It took several days after SAC's February redemption deadline to learn that the firm had been hit with $1.7 billion in redemptions, much more than the $1 billion it had expected.

Cohen is reportedly considering returning all remaining outside capital and transforming SAC into a family office. Whether or not he goes that route, it is likely that SAC will have to scale back its trading and workforce; the Stamford, Conn.-based firm employs nearly 1,000 people.

SAC is the subject of a criminal insider-trading investigation; a grand jury has subpoenaed Cohen and five other SAC executives and prosecutors are reportedly mulling charges against the firm itself. A current SAC portfolio manager and a former portfolio manager have already been charged with insider-trading in two separate incidents, and seven other current or former SAC employees have faced such charges, as well.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...