The hedge fund founded by accused insider trader Raj Rajaratnam will wind down all of its funds, Bloomberg reports.
The fund has been hit by heavy investor redemptions. Many institutional investors are prohibited from investing in any fund managed by someone accused by the government of a serious crime.
Raj Rajaratnam, the billionaire founder of Galleon, wrote a letter to investors telling them that he will liquidate his hedge funds.
Clients of Galleon can exercise their option to withdrawn from the fund by November 15th, but the fund then has until January 1st to execute the exit. It’s not clear if Galleon will attempt to hold on to client money until the new year.
“Galleon doesn’t know when the liquidation will be completed. It will follow the firm’s standard redemption policy, the person said,” Saijel Kishan, who broke this story, writes at Bloomberg.
In the letter, Rajaratnam said Galleon is exploring various alternatives for the business. Galleon has reportedly been approached by potential buyers this week.
Rajaratnam also reminded investors that he claims he is innocent of all charges against him.