If anyone was considering redeeming from the fund, just slow down and think things through; you don’t want to wake up in the morning and realize you’ve made the biggest mistake of your life, walking away from all this [gestures to warehouse full of fleece apparel]. Read more »
SAC Capital Advisors will pay out about $660 million next month to investors who had requested withdrawals amid concerns the hedge-fund firm will face mounting legal and regulatory scrutiny, people familiar with the plan said. Clients had until Thursday to inform SAC if they wanted to withdraw money from the Stamford, Conn.-based firm this quarter. The people said investors asked to redeem about $1.7 billion from SAC. The remaining withdrawals will be paid out over the course of 2013, the people said. “As we have been saying, the redemptions will have no significant impact on our funds,” a SAC spokesman said in a statement Friday. [WSJ]
Friendlier, More Flexible SAC Capital Now Making It Easier For Clients To Leave (Though They Hope You’ll Stay!)By Bess Levin
Time was, SAC Capital didn’t give a rat’s ass what outside investors thought of it. No lip service was paid, no gestures of friendliness offered. Wanted to get your money out ASAP? SAC didn’t give a fuck. You’d wait a year and you’d like it (and wouldn’t dare think about asking for entree again). Now, though, thanks to the work of a former employee named Mathew Martoma, SAC has been forced to show a softer, friendlier, and frankly vaguely unnerving side. Instead of verbal abuse, employees have received pay raises. Instead of quarterly redemptions, this very uncharacteristically accommodating offer: Read more »
According to Fox Business reporter Chaz Gasparino, the hedge fund has been working overtime to convince investors ahead of the February 15 deadline for submitting redemption notices to stick with Steve. With a moderately to majorly amazing sales pitch: Read more »
interesting turns of events
Citigroup’s private bank is pulling about $500 million from Paulson & Co., the hedge fund run by billionaire John Paulson seeking to reverse record losses in 2011, according to two people familiar with the matter. The private bank is redeeming from Paulson’s Advantage Fund and Advantage Plus Fund, said the people who asked not to be identified because the information is private…Citigroup’s private bank in May advised clients not to add money to the Paulson funds, a person familiar with the matter said at the time. [Bloomberg]
Two Percent Of (Former) PIMCO Total Return Investors Don’t Care That Bill Gross Is Working His Ass Off Over HereBy Bess Levin
Bill Gross’s Pimco Total Return Fund had $5 billion in client redemptions last year as the world’s largest mutual fund trailed rivals, its first year of withdrawals in records going back to 1993, according to Morningstar Inc. Clients pulled $1.35 billion from the fund in December, according to Chicago-based research firm Morningstar. Pimco Total Return, managed by Gross out of Newport Beach, California, returned 4.2 percent in 2011, trailing 69 percent of peers, according to data compiled by Bloomberg…In an October letter to clients titled “Mea Culpa,” Gross called 2011 a “stinker” of a year [and swearing he was coming in early and leaving the office late]…Redemptions from Gross’s Total Return fund represent about 2 percent of the fund’s $240.7 billion in assets at the end of 2010, Morningstar’s data show. Assets rose to about $244 billion at the end of last year, according to the data. Investors pulled money from Pimco Total Return in 2011 even as taxable bond funds attracted $121 billion in deposits last year through Nov. 30, according to Morningstar. [Bloomberg, earlier]
They’ll show you. They’ll show all of you! Read more »
One of the most wonderful aspects of the hedge fund industry is that because it attracts the brightest minds, said minds are constantly coming up with new and outside-the-box ways of doing things. Eventually the innovation catches on and before you know it, something that might initially seem crazy eventually becomes best practice at firms worldwide. Take Alphonse “Buddy” Fletcher Jr, for example. The hedge fund manager is the subject of a Wall Street Journal profile today that highlights what the paper describes as Fletcher’s “unorthodox practices.” While it’s clear that some people are passing judgment on Buddy’s ways of doing things, his wiser colleagues in the field will immediately recognize the genius found within and start furiously implementing his methods today. Such as:
Dealing with redemption requests: As many of you may have learned first hand, investors get fairly bent out of shape when you tell them they can’t have their money back. But if you don’t have the cash on hand, what’s the alternative? One hedge fund manager recently said he would pay clients back not in actual money but in illiquid shares of a firm called LightSquared and in what seems to have come as a surprise to him, they didn’t like that either. How does Fletcher deal with such issues?
Last month, after two of the pension boards sought to withdraw some of their cash, Fletcher instead sent them promissory notes “in satisfaction of this redemption request” that pledged payment within two years.
For those taking careful notes the steps are as follows: Step One: redemption request. Step Two: redemption granted. Step Three: investor says “what?”. Step Four: manager says “What are you ‘what’ing? You’re getting your money, just later.”
Let’s continue. Read more »
What ‘Portion’ Of Their $1 Billion In Redemptions Will Harbinger Capital Partners Investors Receive In Actual Cash?By Bess Levin
Monday afternoon, Harbinger Capital Partners founder Phil Falcone informed investors that all those putting in redemption requests were in for a real treat. Instead of actual money, they will be receiving illiquid shares of LightSquared, which Phil is “convinced” provide “substantial upside.” Today, Bloomberg reports that investors have asked for at least $1 billion back (which would shrink the main fund to $3.25 billion). According to the letter, only “a portion” of withdrawl requests will be paid in LightSquared, without going into further detail. So. Read more »
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.
The $1 billion dollar figure was tallied up prior to today’s 5PM deadline to withdraw, so it may be higher. On the bright side, it could’ve been worse, but preventative measures- ‘around 29% of its $5.8 billion in capital is in multi-year lock-ups’- were in place. [WSJ]