Hedge fund managers are drooling over the billions of dollars in outside money headed out of Steven A. Cohen’s portfolio and looking for a new home.
Cohen, the billionaire founder of SAC Capital Advisors, is facing an insider trading imbroglio at his fund, but has yet to be personally implicated.
SAC manages about $15 billion ($9 billion of which belongs to Cohen and his employees). Outside investors redeemed between $2 and $3 billion in Q2.
Now other firms stand to benefit.
Israel Englander’s $18 billion Millennium Management, which has long had a rivalry with SAC, is the name that comes up most often as a possible alternative investment, the industry sources said. The firm also relies on a group approach where dozens of smaller portfolio teams, rather than one or two main managers, buy and sell securities quickly, often thousands of them.
Balyasny Asset Management, Visium Asset Management and Kenneth Griffin’s Citadel, which all feature multi-manager trading teams, have also been named frequently as candidates for some of the estimated $3 billion to $4 billion expected to leave SAC, said industry sources.
Several people mentioned Hutchin Hill, a $1.1 billion firm run by former SAC Capital trader Neil Chriss. The firm employs a strategy similar to Mr. Cohen’s and is taking money from new investors.
Reuters reports that it will take months for the money to be returned to investors, so it may be too soon to predict which hedge funds will profit from SAC’s woes.
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