Steven Cohen’s SAC Capital Advisors LP is giving investors more time to decide whether to pull money from its hedge funds, as they await approval of the firm’s record insider-trading settlement with regulators.
Clients will have until mid-August to tell SAC Capital if they want to withdraw, three months later than previously required, according to a person with knowledge of the plan. They will be able to get 50 percent of their money in each of the third and fourth quarters, said the person, who asked not to be named because the information is private.
“We are hopeful that the next few months will bring greater clarity surrounding the resolution of pending regulatory matters,” Tom Conheeney, president of Stamford, Connecticut-based SAC Capital, said today in a statement. He didn’t provide details on the fund redemption terms.
The firm oversees $15 billion, with more than 60 percent belonging to Cohen and other employees. SAC last month reached a $602 million settlement with the U.S. Securities and Exchange Commission of claims the firm and one of its units profited from illegal tips about a drugmaker received by former portfolio manager Mathew Martoma. A federal judge has signed off on the accord, pending approval of a separate case unrelated to SAC.
SAC in February said investors could delay submitting redemption notices until May and redeem a third of their money in the second, third and fourth quarters. That offer still stands, though they now have the option to wait until August.
Before the changes in February, clients could redeem 25 percent of their assets from the firm each quarter.
Even with the eased redemption terms, SAC clients pulled $1.68 billion from the hedge-fund firm in the first quarter.
SAC’s settlement is conditional on a pending appeals court ruling in an SEC settlement with Citigroup Inc. In the Citigroup case, the court will decide whether the New York bank can resolve the agency’s allegations without admitting wrongdoing. As part of its settlement with the SEC, SAC and its affiliates neither admitted nor denied wrongdoing.