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With The Unwind Approaching, Here Are $18.6 Billion SAC Capital's Largest Stock Positions

Tyler Durden's picture





 

Nearly three years ago, following the publishing of "Is The SEC's Insider Trading Case Implicating FrontPoint A Sting Operation Aimed At S.A.C. Capital?" which exposed the key aspects of SAC's insider trading strategy, and which linked SAC, and the hedge fund world in general, to expert networks three weeks before virtually anyone outside of the 2 and 20 (or 3 and 50 as the case may be) world had heard of them and before they became a household euphemism for insider trading, we expected the full rabid fury of the world's best paid legal team to fall upon us. It didn't, which meant only one thing: we were correct, or they had bigger fish (to avoid harpooning) on their mind. Turns out it was both.

In the months and years following our publication, what we speculated has become fact, and as Vanity Fair's Bryan Burroughs reports, some 71 people have now been convicted or admitted guilt in the case of the government vs Stevie Cohen.

 But the final blow against the formerly infallible hedge fund that redefined the concept of "information arbitrage", and whose track record was almost as successful as that of Bernie Madoff, came from Blackstone, which as Reuters reported moments ago, has decided to pull all its money from SAC, which is the official end of SAC as an outside investment asset management operation. Because once the fund of funds operator, and the largest outside investor in SAC, votes no confidence in Cohen, it's game over, and at best SAC may remain as a family and employee-funded office, assuming of course the DOJ doesn't actually decide to demand restitution for years and decades of insider trading.

Actually, one outside investor may remain: the always amusing Anthony Scaramucci, head of the PR company, which has an occasional FOF operation, SkyBridge Capital. From NYT:

A group of Mr. Cohen’s investors continue to stand by him and hope that he stays in business. For Anthony Scaramucci, chief executive of the hedge fund firm SkyBridge Capital and a friend of Mr. Cohen’s, sticking with SAC has as much to do with friendship and loyalty as it does its superior performance.

 

“A lot of guys, when bombs are going off, you figure out very quickly who your friends are in the trenches,” Mr. Scaramucci said. “Most friends run from bullets, but your best friends run toward them. I have enormous amount of respect for the guy, and I think he’s misunderstood.”

He may be forced to change his tune once Cohen unwinds all outside capital. In the meantime, Blackstone is done. From Reuters:

Billionaire hedge fund manager Steven A. Cohen is losing the financial support of Blackstone Group Inc, the largest outside investor in his embattled SAC Capital Advisors, which is yanking much of its client money, according to a letter reviewed by Reuters.

 

A pension consultant, in a May 21 letter to clients, said Blackstone has notified Cohen that it intends to "fully redeem" a significant portion of the roughly $550 million the investment firm has invested with the $15 billion hedge fund. The letter from pension consulting firm Russell Investments said Blackstone submitted its redemption notice to SAC Capital sometime before May 15 because of ongoing concerns about the insider trading investigation that continues to engulf Cohen's fund.

 

Blackstone's investment with SAC Capital is through several investment funds known as hedge fund of funds and also through separately managed accounts it maintains for clients. The decision to redeem from SAC Capital impacts only client money invested in its hedge fund of funds, according to the letter. It's not clear how much of the $550 million is in those hedge fund of funds and it is not clear what Blackstone is advising clients who have money in separately managed accounts that is invested with SAC Capital.

 

Russell did say in the address to its pension clients that Blackstone "expects to receive 100 percent of investors' capital by year-end." Russell, which manages $173 billion in assets and oversees a number of index funds, also provides advice to pensions and institutional investors on where to invest their dollars in hedge funds.

Regardless, Blackstone's decision is a black stamp of death for SAC:

The decision by Blackstone, which has invested with SAC Capital for at least a decade, is a big blow to the 56-year-old fund manager, who is widely regarded as one of the most successful traders of his generation. Blackstone - which manages about $46 billion in hedge fund investments for public pensions, foundations, corporations and wealthy individuals - is seen as something of a bellwether for other investors in the $2.2 trillion hedge fund industry because of its stature.

 

Blackstone's hedge fund of funds invests client money with more than four dozen hedge funds, including SAC Capital, Pershing Square Capital Management, Elliott Management and DE Shaw & Co, according to people familiar with the private equity firm's asset management business.

 

The decision by Blackstone to redeem comes after the private equity and investment firm has stuck with Cohen throughout the course of the long-running investigation that has so far resulted in nine one-time employees of the firm being charged or implicated in insider trading schemes

The decision is now up to Cohen whether to keep operating in a reduced capacity ex-outside capital, or shut down altogether to remove any spotlight from his hedge fund which suddenly and "inexplicably" is dramatically underperforming the broader market. Should he choose the latter, the implications for market liquidity, already negligible at best, would be dire.

In which case the most important question is if and when the market will begin front-running the liquidation of Cohen's positions, of which there are some $18.6 billion in total, the top 30 of which are listed below:

Finally, anyone who still is unfamiliar with the epic story of Moby Steve and its inevitable denouement, the Vanity Fair's "The Hunt for Steve Cohen" is the best place to start.

 


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Sat, 05/25/2013 - 16:54 | Link to Comment I think I need ...
I think I need to buy a gun's picture

what unwind?

Forward

I watch scaramucci on " CNBS Fast Money" hes a total scumbag

Sat, 05/25/2013 - 17:09 | Link to Comment negative rates
negative rates's picture

Hey lets go over to your house, and sometimes we can go over  to my park.

Sat, 05/25/2013 - 17:34 | Link to Comment buzzsaw99
buzzsaw99's picture

Hey Scaramucci, Your "friend" is taking three and fiddy off the top for running a den of thieves then throwing his lackeys under da bus. Hopefully those bus tire tracks will be running across your back too ya scumbag.

Sun, 05/26/2013 - 15:59 | Link to Comment sgt_doom
Sat, 05/25/2013 - 17:12 | Link to Comment Bobbyrib
Bobbyrib's picture

That's what they get for enforcing insider trading laws. Now Kevin and Ben will have to buy it all.

Sat, 05/25/2013 - 17:12 | Link to Comment max2205
max2205's picture

No jail time.   Oh wait.....

Sat, 05/25/2013 - 17:55 | Link to Comment disabledvet
disabledvet's picture

the Feds have floated the idea of a RICO suit actually. "information racketeering"?

Sat, 05/25/2013 - 17:12 | Link to Comment PiltdownMan
PiltdownMan's picture

I ran that portfolio through Bloomberg. They PAID for this alleged stock picking genius? As Gene Fama said in class about how much a stock analyst should make, "A bunch of bananas because a chimp can do about the same job."

Sat, 05/25/2013 - 17:15 | Link to Comment negative rates
negative rates's picture

Yea chimps used to collect the nickles for the street hot dog vender cause they were more trustworthy than humans and worked for bananas.

Sat, 05/25/2013 - 17:17 | Link to Comment Rustysilver
Rustysilver's picture

PiltdownMan,

Chimps are insulted for being compared to stock analyst.

Sat, 05/25/2013 - 17:16 | Link to Comment Groundhog Day
Groundhog Day's picture

I love it.  All these crooked hedgefund managers claim to be so smart and in reality they just trade on inside info

Sat, 05/25/2013 - 23:50 | Link to Comment pndr4495
pndr4495's picture

One of those very same managers was said to have " titanium nerves."  That person was paid a dynasty building amount of cash in 2008. If I had the answers to the test I would NOT be nervous about my performance on it , 

Sun, 05/26/2013 - 08:45 | Link to Comment BidnessMan
BidnessMan's picture

Hedge fund of funds?  God - we are back to Goldman Sachs Trading Corporation, Shenandoah Corporation, and Blue Ridge Corporation investment trusts from 1929.  Same game with different names.

Sun, 05/26/2013 - 09:45 | Link to Comment machineh
machineh's picture

Not many of us left who remember those watered utility trusts like Electric Bond and Share.

My name's Rip van W. -- pleased to meetcha!

Sat, 05/25/2013 - 17:28 | Link to Comment buzzsaw99
buzzsaw99's picture

Without insider information they were nothing. They'd built a house of straw. The thundering algos sputtered and stopped. The hedge fund managers talked and talked and talked, but nothing could stem the avalanche. Their world crumbled. Cities exploded. A whirlwind of looting, a firestorm of fear. Men began to feed on men.

On the roads it was a white-line nightmare. Only those mobile enough to scavenge, brutal enough to pillage would survive. The gangs took over the highways, ready to wage war for a tank of juice. And in this maelstrom of decay, ordinary men were battered and smashed. Except for one man, armed with and AK-47 and a Honda full of silver.

Sat, 05/25/2013 - 18:48 | Link to Comment WAMO556
WAMO556's picture

Mad max!

Sat, 05/25/2013 - 17:28 | Link to Comment rotagen
rotagen's picture

Of course the guy's name is Cohen.  Jerkoffs.

Sat, 05/25/2013 - 17:47 | Link to Comment gimli
gimli's picture

Once the power of the ring corrupts you, it matters not if you are orc, dwarf, elf or man.

 

Sun, 05/26/2013 - 12:31 | Link to Comment e-recep
e-recep's picture

so the probability must be uniformly distributed among all peoples.

but wait...

Sat, 05/25/2013 - 17:45 | Link to Comment Seasmoke
Seasmoke's picture

thats going to ALOT of 100 blocks to sell

Sat, 05/25/2013 - 17:50 | Link to Comment SIOP
SIOP's picture

Is this good or bad for Blackstone?  Just being associated with Cohen is bad I think?

 

Why do I ask? (true confession, I might be an idiot!) Because I bought a boat load of BLK early last week when the price dipped!  lol.

Sat, 05/25/2013 - 18:04 | Link to Comment disabledvet
disabledvet's picture

of course it's bad. "if you're putting money with the dude it's because you believe in his business practices and are doing so yourself." listen, next to the implosion of Japan this is obviously a nothing burger. having said that if we're talking "forced sales" (don't know why that would happen. don't here any talk of massive fines or levies here...just spending the rest of your life in jail) then obviously if SAC is selling into weakness this could have an "extra umph impact" on the downside...a kind of "jihad Johnny" moment for money. it would dilatory of course as say...Fidelity Magellan just scooped up the entire position at the appropriately "massive discount point"...but hey, sometimes you want to go down swinging. (just make sure the tax implications are thought through as well.)

Sat, 05/25/2013 - 18:12 | Link to Comment q99x2
q99x2's picture

That Ben Bernanke and member banks show gonna own a hellofa lot of stock and fiat money and bonds when they own everything that is imaginary and worthless.

Sat, 05/25/2013 - 19:39 | Link to Comment Ban KKiller
Ban KKiller's picture

Now investigate Fortress Investment Group...easy to spot their mudd..ha! This outfit steals homes for their masters...the criminal banking class. Short! :-)

Sat, 05/25/2013 - 19:39 | Link to Comment Diablo
Diablo's picture

His largest postion, which this article fails to mention, are puts on the SPY. So short what you want, stevie still wins.

 

Sat, 05/25/2013 - 19:40 | Link to Comment NOTW777
NOTW777's picture

no wonder GNC always get bought on dips

Sat, 05/25/2013 - 22:28 | Link to Comment newengland
newengland's picture

Time. This all takes time. The BIS is most unhappy with its over fed House cats. 

The tiny boats of finance float on the great ocean of economics, and sink if they fail.

Captain Ahab killed Moby Dick.

SAC and Cohen are dead in the water, eventually. 

Good.

No thanks to the vanity fayre.

Sat, 05/25/2013 - 23:12 | Link to Comment kragsquest
kragsquest's picture

For every hedge fund like this that is waiting for the other (federal) shoe to drop, there are a thousand that are willing to take chances with being caught, some that even throw caution to the winds as we have seen.  SACs ship is going down and the rats have already begun to jump off the sinking ship....

Sun, 05/26/2013 - 02:07 | Link to Comment MythicalFish
MythicalFish's picture

Blue Horseshoe loves SBUX and GNC vs XLP short.

Sun, 05/26/2013 - 10:08 | Link to Comment ToNYC
ToNYC's picture

Another Perpetual Notion machine up in smoke and mirrors and down in sunlight.

Sun, 05/26/2013 - 21:36 | Link to Comment Wannabee
Wannabee's picture

Off topic:
Im trying to find the post from someone that did volunteer work in a very poor village in Central America. Before they left for the states, they bought shoes and soccer balls for the village. Very moving story, I would like to review again. Ring a bell with anyone?

Tue, 05/28/2013 - 02:58 | Link to Comment zipit
zipit's picture

TYPO: "widely regarded as one of the most successful traders of his generation" should read "widely regarded as one of the most successful criminals of his generation."

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