Steve Cohen’s SAC Investors Pulling $3.5 Billion Out of the Hedge Fund.
SAC Capital Advisors LP is bracing for investors to pull an estimated $3.5 billion from the firm, according to people briefed on the matter, as the hedge-fund giant continues to battle fallout from an intensifying insider-trading probe.
Hedge fund SAC investors to grow increasingly worried about the fund’s future. Already this year, investors have pulled $1.7 billion from the $15 billion fund, or about a quarter of the outside money managed by SAC. (Mr. Cohen’s fortune and employee money accounts for about $9 billion of the fund.)
At least three have indicated they are withdrawing money, according to people briefed on the matter. Blackstone Group, SAC’s largest outside client, is expected to redeem more than half of roughly $500 million. Magnitude Capital, a New York-based firm that invests client money in hedge funds, has asked for its money, though how much is unclear.
A third investor, Ironwood Capital Management, has also put in a withdrawal request. Ironwood, a San Francisco-based fund, decided to pull its money after SAC said last month that it was no longer cooperating “unconditionally” with the government or providing investors with updates about the investigation.
Billionaire hedge fund manager Steven Cohen is losing the financial support of Blackstone Group Inc, the largest outside investor in his embattled SAC Capital Advisors, which is yanking much of its client money, according to a letter reviewed by Reuters.
Blackstone letter to clients said it has notified Cohen that it intends to “fully redeem” a significant portion of the roughly $550 million the investment firm has invested with the $15 billion hedge fund. The letter from pension consulting firm Russell Investments said Blackstone submitted its redemption notice to SAC Capital sometime before May 15 because of ongoing concerns about continiuing the insider trading investigation.