Hours before a crucial quarterly deadline for outside investors wanting to pull their money, officials of SAC Capital are expecting to lose a "significant" portion of its $6 billion in external assets, said two people familiar with the matter, suggesting that the years-long probe into alleged insider trading at the firm is now forcing even loyal investors to walk away.
Details of Monday's withdrawal notices, which must be filed by the end of the day but won't result in the full return of money until late December, are not yet known. But early indications of investor sentiment suggest that SAC is likely to lose billions over that period, exceeding the $1.68 billion yanked during the first quarter.
A number of outside investors have already telegraphed their intentions to leave. The alternative asset management unit of Blackstone Group, for instance, which at roughly $410 million in capital is SAC's largest external investor, plans to follow its first-quarter redemption with an even more substantial one this quarter, said someone familiar with its plans.
Other investors, including the money manager Ironwood Capital, which is pulling $100 million, according to someone familiar with its plans, have already made considerable redemptions. Major brokerage firms with money invested in SAC, including Morgan Stanley and HSBC, may also follow suit, said people familiar with the matter, although their final decisions are not yet clear.