SAC Capital axes once prominent trading unit

As SAC Capital fights an insider trading indictment and braces for investor withdrawals, the giant hedge fund has quietly shuttered one of its stock trading units, people briefed on the matter said.

The New York Times reports that the sudden demise of the unit, Parameter Capital Management, offers a glimpse of a slimmed-down SAC — leaner than the powerhouse fund built over two-plus decades by the billionaire Steven A. Cohen.

Parameter’s closure also reflects SAC’s reversal of fortunes in the wake of the indictment.

SAC created the unit, one of several divisions of the hedge fund, with much fanfare three years ago. It hired two prominent SAC alumni, Anil Stevens and Glenn Shapiro, to oversee the unit. The stock-picking pair, whose returns are up slightly this year, built a division that invested heavily in banks and other corporate giants, records show, including Wells Fargo and Bank of America.

In recent days, however, Parameter liquidated all its investments. By Monday, Parameter’s phone lines were disconnected and its e-mail addresses defunct.

A person close to SAC said that Parameter, which managed a fraction of the assets that make up the hedge fund’s $14bn business, set the shutdown in motion a year before prosecutors and the F.B.I. in Manhattan announced the hedge fund’s indictment in July.

To access the complete New York Times story hit the link below 

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image: © Torpe

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