Thursday, 21 August 2014
Last updated 8 hours ago
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.
Aug 4 2014 | 7:42am ET
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The Alpha Pages Editor's Note