Tags: investors, Redemptions, SAC Capital, Steve Cohen
As a result of the Feds’ current attempt to prove insider trading has gone down at certain hedge funds on Wall Street, several shops- some without verdicts of guilt- have been forced to close their doors. Investors saw the fund’s name in the paper in the same headline in which the words ‘insider trading’ appear and that was that. Until recently, such has not been the case for SAC Capital and why is that? Because unlike other funds, which apparently need to include a ‘no pussies’ clause and a forewarning that any stories of possible illegality set off an immediate gate, SAC investors have balls. There is nothing you could put in their faces that would make them flinch. Bat-shit insane ex-wives crying insider trading? Associations with traders who’ve pleaded guilty to putting material non-public information to use? Sodomy by whiteboard marker? Staffers losing appendages in the deep-fryer? You’ll have to do better than that, they say. Except for one.
According to Institutional Investor, “at least one well-known investor” has asked for his money back from SAC. Sayeth said investor, who requested anonymity: “We don’t want to be fickle. We hate doing this.” Such a statement bring several thoughts to mind.
* Who in IR let this weak-stomached I don’t want to say little bitch but little bitch into the fund?
* Anyone who says “we hate doing this” while doing this must SHOW THY FACE
Okay. Now that we’ve had a chance to regain our composure, there’s a logical explanation for this which is that the “well-known” investor is Steve Cohen himself. And not because he needs the liquidity or is scared but as a test- to see if SAC investors are sheep. As Fortune‘s Katie Benner notes “investor psychology can be herd-like” and “if a fund loses a series of investors, or an investor who is considered smart money, it can cause a stampede.” At other funds, all it takes is one. SC wants to suss out now who’s got a pair and who doesn’t. Considering the fund is already at capacity and recently stopped accepting new money, your place can and will be quickly filled. Should this theory not pan out, and the investor turn out to be someone other than Steve, good riddance and enjoy your Vanguard index mutual fund.
Steve Cohen’s SAC Gets Redemption Request From Investor [II via Fortune]