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Alternative Market Briefing

Embattled hedge fund SAC Capital continues to outperform with 13% gains YTD

Thursday, September 26, 2013

Komfie Manalo, Opalesque Asia:

Embattled hedge fund manager Steven Cohen continues to defy the odds as SAC Capital Advisors’s main hedge fund outperforms its rivals and registered 13% gains as of last Friday, various media reported. Meanwhile, the $14bn firm is facing criminal charges for alleged insider trading.

SAC Capital’s good fortune outweighs its counterparts as Reuters reported that the average hedge fund earned about 4% YTD as at end August.

Even at the height of the emerging markets selloff in June, when most hedge funds registered negative returns, his fund posted a 1.5% gain during the month (+8.25% YTD). In June, the average hedge fund lost about 2.1%, according to Bank of America Merrill Lynch

Last July, U.S. Federal prosecutors indicted SAC Capital and accused the firm of promoting a culture that allows its portfolio managers and analyst to gather or trade using inside information on various stocks while employed at the firm. U.S. attorney Preet Bharara described SAC as a "magnet for market cheaters".

As some investors have been pulling out, SAC has had to let go of some sales and marketing staff. Reuters also reports that to avoid an exodus from the traders, SAC committed to paying them a 3.5% bonus next year if the......................

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