SAC Capital investors expected to pull out $3.5 billionPosted by TM Snyder on June 3, 2013
Hedge-fund giant, SAC Capital Advisors is expecting its investors to pull out a whopping $3.5 billion from the firm, which will severely affect its market value going forward. Leading up to this, is a continuing insider trading probe into the company, according to people closer to the matter.
The company believes that the figure of $3.5 billion is just a preliminary number and the withdrawal could actually be much larger. The deadline for the clients to demand their money back from the company is on Monday. The hedge fund has received withdrawal requests for about $1.7 billion during the first quarter of this year.
Estimates show that the withdrawals could rise to nearly half of the firm’s remaining outside capital and increase the total withdrawal request to more than $5 billion. The firm, which was founded by highly regarded investor, Steven A. Cohen, has been returning gains from the previous 20 years. It is believed that the government investigation is having a heavy impact on the company’s reputation and investor confidence in the company.
Most of the company’s $14 billion in assets belong to Cohen personally or the employees of the firm. Mr. Cohen and other SAC executives might also consider turning the company into a family office that would only look after a wealthy family’s money and not cater to external clients at all.
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