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* Ironwood Capital Management to pull $100 million
* Blackstone Group also to redeem from Steve Cohen's fund
* Hedge fund is a target of insider trading probe
By Katya Wachtel
NEW YORK, May 28 (Reuters) - Ironwood Capital Management plans to pull about $100 million from embattled hedge fund SAC Capital Advisors, adding to the list of problems for billionaire trader Steven A. Cohen.
San Francisco-based Ironwood notified SAC last week it would be taking its money out of the $15 billion fund because of changes in access to information about an ongoing insider trading probe, according to a person familiar with the situation.
Ironwood, a fund of hedge funds, decided to withdraw client money from Cohen's fund after SAC told investors earlier in May it was no longer cooperating "unconditonally" with the government in its investigation and might not be able to give investors frequent updates on the probe.
That reduced transparency made it difficult for Ironwood to remain invested and was the catalyst for the redemption, according to the person with knowledge of the decision.
A spokesman for SAC Capital had no comment.
News of Ironwood's decision comes as SAC grapples with an even bigger loss of financial support from Blackstone Group Inc , the largest outside investor in Cohen's fund. According to a letter from pension consulting firm Russell Investments, Blackstone has decided to redeem a significant portion of its roughly $550 million allocation to SAC, Reuters reported on Saturday.
Blackstone's fund of hedge funds unit has about $295 million invested in SAC Capital International, according to the letter, which said the fund of funds represents 3 percent of the assets in that SAC portfolio - the firm's largest.
Outside investors in SAC Capital, who account for roughly $6.75 billion of the $15 billion managed by Cohen, have until June 3 to decide whether to submit redemption notices for the second quarter. In the first quarter, outside investors told Cohen they intended to withdraw about $1.7 billion of that $6.75 billion by the end of the year.
Cohen himself has not been charged with wrongdoing, but the probe is seen as increasingly focusing on him and his firm. Earlier this month federal authorities issued grand jury subpoenas seeking testimony from Cohen and other executives at SAC.
While Blackstone, which manages about $46 billion in hedge fund investments for pensions, foundations, corporations and wealthy individuals, is seen as something of a bellwether for other investors in the $2.2 trillion hedge fund industry, it is unclear how other outside investors in Cohen's fund will act.
HSBC and Morgan Stanley, which both have client money with SAC, declined to comment on how they plan to proceed.