Dec. 12 (Bloomberg) -- SAC Capital Advisors LLC, the $16 billion hedge-fund firm run by Steven Cohen, told investors they can remove money early from its multi-strategy fund, in contrast to firms that are restricting withdrawals.

Investors in SAC’s Multi-Strategy Fund Ltd. who want their money returned in the first half of 2009 must notify the firm this month, the Stamford, Connecticut-based company said in a letter yesterday. Normally, clients can’t take out any money for three years after their first investment; after that, they have to keep their remaining cash in the fund for one-year periods. Jonathan Gasthalter, a spokesman for SAC, declined to comment.

“In times when confidence in hedge funds is getting broken, it’s definitely a move in the right direction,” said Cem Habib, a portfolio manager at London-based Altedge Capital Ltd., which invests in hedge funds. “They don’t have to do this. It’s a goodwill gesture.”

SAC, which was started by Cohen in 1992, is bucking the trend of most rivals such as Fortress Investment Group LLC and Tudor Investment Corp. that in the past month have limited investor redemptions after being inundated with requests. Investment losses and withdrawals may shrink the hedge-fund industry by 45 percent by Dec. 31 from its peak $1.9 trillion in June, according to an estimate by Morgan Stanley.

“We are under no obligation to make any such distribution and may, in our discretion, determine not to make one,” SAC said in the letter signed by Lisa Alexander, on behalf of the board of directors of the Multi-Strategy Fund.

13 Percent Loss

The fund has lost 13 percent this year through November, according to investors. That compares with an average 18 percent decline by hedge funds globally, according to Hedge Fund Research Inc. in Chicago.

Payments to clients will be made based on the amount they invested in the fund, the letter said. Holdings in what SAC calls special investments won’t be eligible for redemptions, the letter said.

Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on falling as well as rising asset prices and participate substantially in profits from money invested.

To contact the reporter on this story: Saijel Kishan in New York at skishan@bloomberg.net

Last Updated: December 12, 2008 12:05 EST