By Svea Herbst-Bayliss
BOSTON, April 26 Hedge fund titan Steven A.
Cohen is giving investors more time to withdraw their money from
SAC Capital Advisor's funds, as his $15-billion firm faces
continued federal scrutiny in an insider trading investigation.
With about three weeks to go before investors in SAC Capital
Advisors need to decide on whether they are pulling their money
out, Cohen is offering them a quicker way to access their cash
in a bid to convince them to stick with him.
"We are offering our investors additional time to make their
decisions as we are hopeful that the next few months will bring
greater clarity surrounding the resolution of pending regulatory
matters," said SAC Capital President Tom Conheeney.
Investors will now be able to get back 50 percent of their
money in each of the last two quarters of the year, the firm
told investors. This marks the second time in about two months
that SAC has adjusted its liquidity conditions.
Initially, the firm would pay back withdrawals spread out
over four quarters. Then the firm hastened the payouts to one
third of investors' fund stakes per quarter and now it will be
half per quarter.
Cohen and his senior executives have been speaking to
investors and one source familiar with the discussions says
clients have reacted positively. The source said that the firm
felt it could offer these more generous liquidity conditions
without jeopardizing the funds.
Outsiders' money accounts for only about $6 billion of the
firm's money under management, but Cohen appears to be trying to
pacify jittery clients who said in February that they wanted to
pull out $1.7 billion at the end of the first quarter.
Since that deadline, the firm agreed to pay $616 million to
settle an insider trading case with the Securities and Exchange
Commission. A few weeks after that, Michael Steinberg, one of
Cohen's top portfolio managers, was arrested and charged with
One of SAC's most important clients is Blackstone Group
, which has some $550 million with Cohen and was
instrumental in negotiating the better conditions in February.
At the time, Blackstone was staying put.