Blackstone sticking with SAC Capital


Embattled hedge fund firm SAC Capital, run by the controversial Steven Cohen, has gone to considerable lengths to keep limited partners on board.

That effort seems to have borne fruit so far, as the fund firm has not suffered mass defections. The firm got some good news recently from Blackstone Group, one of SAC Capital's largest investors. According to Reuters, "Blackstone, which has $550 million invested with SAC Capital, is in no rush to redeem money from the Stamford, Connecticut-based hedge fund. Blackstone has had at least three discussions with the $14 billion hedge fund's executives about the insider trading investigation and talked to its own investors, which include state pension funds, endowments and wealthy individuals."

The redemption situation is likely seen as fluid by some limited partners. Investors in SAC Capital have until the middle of February to decide whether to redeem funds. So it is possible that a trigger event will lead to a near-term redemption. Certainly, a major development like an indictment against the firm or founder Cohen could prompt many investors to act.

One big issue as of now is whether public pensions will get nervous with their end investments in SAC Capital funds and demand portfolio changes in the funds-of-funds in which they have invested. Were it not for decent returns at SAC Capital, the decision to redeem would be a lot easier.

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