SAC Thinking the Unthinkable

The once-proud firm, which could blithely charge three-and-50 with a dismissive shrug of the shoulders or a penetrating, "you've got a lot of fucking nerve to question me" glare, has suffered indignities ranging from a snub from Citigroup (Citigroup!) to begging and coughing up extra cash to hang on to employees to pleading with clients to stick with it through the hard times, even as it continues to post double-digit returns. Now, it's having Japanese banks turn up their noses at a once-in-a-lifetime, too-good-to-be-true opportunity to get a little piece of the Big Guy's pie.
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The once-proud firm, which could blithely charge three-and-50 with a dismissive shrug of the shoulders or a penetrating, "you've got a lot of fucking nerve to question me" glare, has suffered indignities ranging from a snub from Citigroup (Citigroup!) to begging and coughing up extra cash to hang on to employees to pleading with clients to stick with it through the hard times, even as it continues to post double-digit returns. Now, it's having Japanese banks turn up their noses at a once-in-a-lifetime, too-good-to-be-true opportunity to get a little piece of the Big Guy's pie.

Mizuho Financial Group had discussed last year making a major investment that could have brought as much as $500 million to SAC, said people briefed on discussions with SAC executives and advisers.

But the bank ultimately notified SAC that it wasn't proceeding. By December, with scrutiny of SAC's trading practices mounting, the firm's executives told advisers and others inside and outside the firm that Mizuho's decision appeared final, the people said.

It gets worse.

SAC marketers also have reached out to hedge-fund investors and consultants about meeting representatives of the firm later this month at Morgan Stanley's hedge-fund conference at The Breakers resort in Palm Beach, Fla., according to people familiar with the communications.

SAC is expected to host a golf-and-dinner outing this weekend in conjunction with the conference, they said.

Steve Cohen does not pay for others to dine and golf with him or his minions! You pay, out of what's left of your half of the profits after he gets his 3% management fee!

But a grimmer reality is dawning over Stamford. A bleak, SAC-less reality, when no one gets his money managed by Steve Cohen except Steve Cohen himself, with Steve Cohen's own deepest desire to continue managing your money thwarted, ignored, made irrelevant.

At the same time, in recent weeks, SAC executives and advisers have discussed options should redemptions continue to whittle away at the firm's outside capital, according to people briefed on the discussions.

Recent internal discussions have included proposals for cutting staff and other contingency plans for running a smaller firm. It isn't clear what amount of withdrawals, if any, could prompt a decision to return money to outside investors, the people said.

Mr. Cohen has long been insistent in his view that SAC should keep managing outside investors' money, people involved in the discussions said.

The penultimate indignity: a family office. What comes after that? We shiver at the thought.

SAC Misses Out on Big Investment [WSJ]

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Opening Bell: 12.03.12

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Opening Bell: 11.26.12

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Things Could Be A LOT Better At SAC Capital Right Now

Back in October, we detailed a list of things that, if you are the hedge fund manager who goes by the name Steven A. Cohen, you really don't want to hear first thing in the morning. They included: “The fleeces are on back order”; “Your ex-wife is in the lobby”; “There’s a photographer here who said he’s been authorized to shoot you wearing a king’s robe and crown for a set of playing cards”; “You’ve been outmaneuvered for the Toledo Mud Hens. But I hear the Binghamton Mets may be available.” Today we must update that list to include another thing, perhaps THE thing,* that people delivering news to Cohen don't want to relay. Paraphrasing but any variants on: "Mr. Cohen, we've received a Wells notice and by the way, they're considering naming you personally."