The Morning Brief: SAC Investors Cash Out Close to $3bn in Q2

It looks like Steven Cohen’s SAC Capital Advisors lost close to $3 billion in outside capital after receiving notifications of redemptions of $1.7 billion in the first quarter, CNBC reports. The embattled Stamford, Connecticut-based hedge fund firm, which managed about $14.5 billion last month, will mostly be dominated by Cohen’s own capital, estimated at around $9 billion.

Separately, federal prosecutors and the University of Michigan medical school are close to reaching an agreement that would provide the government access to encrypted computer files related to the insider trading case against former SAC Capital employee Mathew Martoma. The government claims the files of Dr. Sidney Gilman, a former professor of neurology at the medical school, are critical to their case against Martoma, who is accused of receiving confidential drug trial information from Gilman. Martoma’s trial is scheduled for November 4.

Investors who bottom-fished Apple’s stock suffered a setback Monday when the iPad maker’s shares slumped $3 as it continued to make a series of presentations at its annual developer’s conference. The stock is still up nearly 13 percent from its April 19 bottom, although it is still down about 37 percent from its all-time high. In the first quarter, David Einhorn’s Greenlight Capital boosted its stake by more than 83 percent, while David Tepper’s Appaloosa Management bought a small number of shares at the bottom. At the conference, Apple introduced a new music streaming service and changes to the software for its iPhones and iPads.


Office Depot and OfficeMax each announced they will hold special shareholder meetings on July 10 to vote on their proposed merger. Meanwhile, New York-based activist hedge fund firm Starboard Value — Office Depot’s largest shareholder — is trying to unseat six directors at Office Depot and has called on the company to hold an annual meeting to discuss its proposals prior to the closing of the merger. One thing is clear: A Starboard regulatory filing in response to the merger vote should be filed within a day.

Elliott Management and Davidson Kempner Capital Management each have established stakes exceeding 1 percent in British water company Severn Trent. They are betting the company will be acquired even though on Friday Severn Trent rejected a bid from LongRiver Partners, a consortium comprised of three investors, including a Kuwaiti sovereign wealth fund.

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