Steven A. Cohen may be left with less than $1bn from outside investors, down from $6 billion at the start of the year, after today’s deadline for withdrawals from his SAC Capital Advisors LP, according to four people with knowledge of the situation.
Bloomberg reports that SAC insiders expect clients to say they will take back most of the $4bn they haven’t already marked for redemptions by early next year, according to the people, who asked not to be identified because the information is private.
The redemption requests, which would be met over the rest of this year, come after clients said in the first quarter they would pull $1.68bn.
Investors are exiting as the U.S. government intensifies its probe of insider trading at the Stamford, Connecticut-based firm, once one of the most successful in the hedge-fund industry, with returns averaging 25% since 1992. The withdrawals increase the odds that Cohen will convert SAC into a family office managing his own fortune. He has about $7.5bn in SAC’s funds, while employees account for $1.5bn of assets, according to data compiled by Bloomberg.
'I’d put the odds at pretty good for him to go private', said Jay Rogers, president of Irvine, California-based Alpha Strategies Investment Consulting Inc., which advises hedge-fund clients as well as managers seeking to raise money. 'His performance has been great for many years, but this case is becoming so much of a distraction to him, and investors are saying there’s too much headline risk to be involved'.
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