We assure you, your job is (likely) safe, SAC Capital told its employees in an email that surely won’t make anyone sleep well at night. The beleaguered hedge fund, bracing for a massive outflow of customer funds due to the government’s ongoing insider trading investigation, says it has no plans to become a family office, nor does it expect to see significant staff reductions. We’ll see.
Despite rumors that SAC saw nearly every dime of customer money walk, the firm told employees in an email obtained by Bloomberg that it has a “stable capital base” and will “still be a good-sized firm.” Conventional wisdom says they’re wrong, but let’s remember: this is Steven Cohen. He’s made a living off of doing what people told him he shouldn’t, or often times couldn’t. He also hates losing.
In an attempt to offer a sense of optimism to employees who likely fear for their jobs, SAC President Tom Conheeney pointed to two realities. One: SAC raised $500 million last year for a reinsurance company that can invest in its hedge funds. It’s not $9 billion, but it’s a start.
In addition, Conheeney said that key customers who redeemed their investment suggested they’d be willing to reconsider once the dust settles from the insider trading investigation. Reasonable considering the firm’s 25% return rate since 1992.
The fate of SAC – and its employees – all comes down to Cohen. Is he stubborn enough to keep his 1,000-person team intact as he attempts to rebuild the business while dodging a federal probe? I guess it’s possible. We heard from recruiters that, audaciously, SAC continues to interview junior people, mostly in research. For now we’ll have to wait and see, but hiring managers at rival firms can certainly expect to see an influx of resumes with “SAC Capital” resting on top.
Advice from Lloyd Blankfein (eFinancialCareers)
Goldman Sachs Chief Executive Lloyd Blankfein grew up an underprivileged, relatively insecure, street-tough kid. He explained how it made him the leader he is at a commencement speech at Laguardia Community College on Thursday.
No Excuses (Financial News)
Colin Fan and Rob Rankin, co-heads of Deutsche Bank’s investment bank, reject the “simplistic” theory that impending regulations will put European firms at a disadvantage to their U.S. rivals. Business model and scale will be the differentiators, they said.
A Nasty Disappointment (eFinancialCareers)
If you’re about to start an internship at an investment bank, here’s how we suggest you let yourself down gently before the internship lets you down hard.
No Discounts (Financial News)
Despite the difficult environment, hedge fund managers are sticking to their guns. Roughly 83% of investments in hedge funds in 2012 were made on full fees.
‘Scary’ Environment (Bloomberg)
Aggressive stimulus and rock bottom interest rates can’t exist forever. When the tide inevitably turns, “it’s going to be scary,” said J.P. Morgan Chief Executive Jamie Dimon. Think massive volatility.
Don’t Freak Out (Challenger, Gray and Christmas)
Job cuts in the financial sector are up 103% year-to-date, from 17,284 in 2012 to 35,091 this year. It’s not all bad though. Many of the cuts come as banks are scaling back their foreclosure units as the housing market continues to recover.
Getting Personal (WSJ)
U.S. and U.K. investigators are expected to bring criminal charges against Barclays employees who had a role in manipulating Libor interest rates.
Buzz Around the Office
Tajikistan banned its citizens from accessing YouTube a day after a video was uploaded showing its president completely flopping during a karaoke song at his son’s wedding.
List of the Day: Quitting Gracefully
Before quitting your job, come up with a game plan to help prevent you from burning any bridges.
- Write a letter of resignation.
- Jot down bullet points of what you’ll say.
- Be overly helpful in the transition process.
(Source: The Daily Muse)