The Blackstone Group L.P. (NYSE:BX) is said to be planning to pull out almost $400 million from SAC Capital Advisors, the hedge fund led by Steven Cohen and embroiled in controversy over insider trading allegations. That’s according to a report by Jenny Strasburg in The Wall Street Journal.
Blackstone said in December that it would keep its money in the hedge fund, but earlier this year, SAC Capital made an agreement with Blackstone and its other investors. The agreement gave its clients three months to choose if they wanted to redeem or maintain their assets in the fund. Monday is the deadline for clients to decide if they want to keep their assets in SAC Capital.
Blackstone’s New Plans For Withdrawing From SAC
According to Strasburg’s report, sources said The Blackstone Group L.P. (NYSE:BX) may pull almost all of its money out of SAC Capital. That almost $400 million is possibly twice as much as the firm expected to withdraw earlier this month.
Blackstone may have decided to withdraw more of its money as concerns about the future of SAC Capital continue to heighten. Earlier this week, Cohen was said to be weighing the idea of shutting down the hedge fund and instead opening up a family office of sorts to manage his personal funds.
The fund manages approximately $15 billion in assets, so while Blackstone’s $400 million is virtually a drop in the bucket, the firm is one of SAC Capital’s largest outside investors. That means whatever Blackstone decides to do could heavily influence the decisions of other investors and Wall Street firms.
Redemptions From SAC Capital’s Other Clients
Some major investors aren’t waiting to see what The Blackstone Group L.P. (NYSE:BX) will do. Ironwood Capital Management took out its full $100 million investment. Ironwood has been one of the fund’s clients since 2007.
During the first quarter of the year, SAC Capital clients pulled out about $1.7 billion from the fund. That’s approximately a quarter of the fund’s outside capital. Meanwhile U.S. officials have only intensified their scrutiny of SAC Capital, sending subpoenas to Cohen and other executives at the firm. At this point however, neither SAC nor Cohen himself have been accused of criminal wrongdoing.