SAC Capital Advisors, the embattled hedge fund owned by billionaire Steven Cohen, is, reportedly, now preparing for a shut down and being convert into a family office to manage its personal funds.
SAC is creating a plan to return outside capital, according to a report by Fox Business. Sources told the network that an announcement regarding SAC becoming a family office, managing only founder Steven Cohen’s fortune, will come within weeks.
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Cohen’s plan would be crucial particularly for SAC’s 1,000 employees. Ending his business operations will mean considerably reducing the number of staff that would work for his family office.
Cohen has US$9 billion investments in his hedge fund, which means he will still manage one of the largest portfolios without outside investors, the Fox Business report added.
The news comes amid a wide-ranging federal probe into SAC’s activities, including whether the fund traded on inside information and the likelihood of large investor redemptions in the coming weeks.
Blackstone Group, SAC’s biggest outside investor, has pulled back support and notified Cohen that it intends to ‘fully redeem’ a significant part of the approximate US$550 million it has invested with the hedge fund.
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By GlobalDataEarlier in May, SAC told investors that it will no longer cooperate "unconditionally" with the US government’s insider trading investigation.
