* 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 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
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
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
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.