SAC Capital's Parameter Capital trading group closes: sources
By Katya Wachtel
NEW YORK (Reuters) - An affiliated fund of Steven A. Cohen's SAC Capital Advisors shut down last week as the $14 billion hedge fund begins to shrink in the wake of a criminal indictment filed against it in July, according to two people familiar with the unit's closure.
Parameter Capital Management, which had managed money for SAC since 2010, traded mainly financial stocks. The team was run by portfolio managers Glenn Shapiro and Anil Stevens. Stevens is leaving to launch his own fund, according to one of the sources.
The sources said the decision to close Parameter had been planned before federal prosecutors charged Cohen's firm in a five-count indictment with fostering a culture where employees flouted the law and were encouraged to tap their personal networks for inside information about publicly traded companies.
The unit's returns were roughly flat this year, according to the sources.
Tom Conheeney, SAC Capital's president, sent an email to the firm's employees on Saturday, in response to several news reports about the future of SAC's business and structure. In the email, according to one of the sources, Conheeney said the firm will have as much capital to invest at year's end as it had in 2009.
Parameter's Stevens is taking most of the Parameter team with him, according to one of the sources. Stevens has been planning to start his own firm for some time, that person said.
Shapiro's plans are unknown.
Both people familiar with Parameter's closure were not authorized to speak publicly about SAC. It was unclear how much money Stevens and Shapiro oversaw for Cohen's hedge fund, which in the process of returning $5 billion in outside investor money by the end of the year. Continued...