- Firm plans to wind down fund after former traders charged
- Remaining money to help pay for costs related to U.S. probe
Visium Asset Management told investors in its multi-sector Global Fund that about 1 percent of assets will be held back to help cover certain costs, including those related to an investigation by U.S. authorities, according to a person with knowledge of the matter.
Visium told investors in a letter last week that it plans to wind down the fund, which had been the last remaining hedge fund at the New York-based firm, after three former traders were charged with securities fraud. Investor withdrawals amid the probe led founder Jacob Gottlieb to strike a preliminary deal to sell the Global Fund to AllianceBernstein Holding LP and shutter his four other hedge funds.
The Global Fund, which oversaw $2.3 billion as of May 31, will return 95 percent of its assets to investors by Aug. 30. The remainder -- with the exception of the reserve -- will be paid upon completion of an audit, Visium told investors, according to the person, who asked not to be named because the information is private.
Visium is already planning on retaining as much as 5 percent of investor money from its flagship Balanced Fund for "liabilities and other contingencies" including those related to a government lawsuit against the traders. While one of the Balanced Fund’s money managers was charged by federal prosecutors with insider trading, no one at the Global Fund has been accused of wrongdoing.
Jonathan Gasthalter, an outside spokesman for Visium, declined to comment. Jonathan Freedman, a spokesman at AllianceBernstein, declined to comment on the status of the deal.