SAC Capital is not dead and it does not want people to think that it is and all the plans (wishes) to become a family office are also baseless. SAC’s president, Tom Conheeney, said that SAC will continue to work as a hedge fund and has no problem in working with assets that are close to what the fund managed four years ago as first reported by Katherine Burton, Saijel Kishan and Kelly Bit of Bloomberg.
SAC Capital Is Not Planning Staff Reduction
Tom Conheeney said in a reassuring email to its employees that they will not release the actual number of redemptions but added that they were significant. He also said that some of its investors who requested redemptions had indicated that they may revoke them if SAC’s legal mess clears up. Conheeney said SAC is also not planning any major staff reductions. SAC Capital employs about 1000 personnels, out of which 400 work in investment advisory roles and 115 are portfolio managers. The rest of the staff is involved in marketing, business development and accounting.
The firm has $15 billion under mangement, excluding the outflows of first quarter. SAC’s outside capital is reported to amount to $4 billion. The hedge fund would still have an estimated $9 billion from Cohen’s personal fortune and employee accounts to manage even if all clients take out their capital. In Q1, SAC faced $1.7 billion in redemptions and the expectation was that clients would redeem as much as $3-4 billion in this quarter, wiping out all outside investments. Conheeney’s email came a day after the June 3 deadline that was set by the hedge fund for withdrawal notices.
Cohen is embroiled in a tough legal battle over allegations of insider trading with no clear signs of settling the charges in sight. Cohen has a strong desire to continue business after the dust settles. The firm raised $500 million for its new reinusrance business. SAC Re last year and except for this huge speed bump, was sailing high on all avenues.
Conheeney also said that the firm has been performing well in this year and has all the reason to continue business. SAC Capital has been among the best of the industry, giving out a 25 percent return on average since its inception in 1992.