Wall Street waits to see if investors still love SAC Capital

Thu Feb 14, 2013 2:27pm EST
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By Svea Herbst-Bayliss and Katya Wachtel

NEW YORK (Reuters) - Outside investors in Steven A. Cohen's SAC Capital Advisors have until the end of the day to decide if they still love the embattled billionaire hedge fund manager.

Cohen already has told staff to expect outside investors in SAC Capital to submit requests to withdraw up to $1 billion in the wake of the latest round of insider trading allegations involving former employees of the $14 billion hedge fund.

The big question as the deadline for submitting redemption notices approaches is whether the withdrawals exceeds Cohen's own estimate.

With outside investors accounting for about $6 billion of the firm's money under management, the impact of the redemptions may prove to be more symbolic than anything else. Roughly 60 percent of SAC Capital's money comes from dollars invested by Cohen and his employees.

Already, Titan Advisors, Citigroup's private bank and Lyxor Asset Management have announced they want to withdraw money on behalf of their investors. Sources familiar with SAC Capital said those three combined have between $300 million and $500 million invested with Cohen's hedge fund.

SAC Capital spokesman Jonathan Gasthalter said: "We do not expect the redemptions by certain external investors to have a significant impact on our funds."

In an unrelated move, SAC Capital recently dismissed two energy trading portfolio managers and two analysts, said a source familiar with the firm. The dismissals come on the heels of an earlier decision by Cohen to close the firm's Chicago office and let four teams of portfolio managers and analysts go.

A person close to SAC Capital characterized the layoffs as part of the normal year-end performance review process at the hedge fund.   Continued...

An exterior view of the headquarters of SAC Capital Advisors, L.P. in Stamford, Connecticut, in this picture taken December 13, 2010. REUTERS/Mike Segar