Abandon ship

WSJ: investors flee Galleon Group. It’s too bad – some excellent, honest people worked at the firm, several of them from Greenwich, but institutional investors don’t want to deal with a firm whose principal is the latest poster boy for ankle monitors and, after Madoff, can you imagine anyone sticking around and then trying to explain losses to clients with the explanation that Raj is presumed innocent until proved guilty? Nor can I.

UPDATE from Bloomberg 10/20/09:

Redemption requests totaled $1.3 billion, the Wall Street Journal reported yesterday. The firm has assets of $3.7 billion, including about $1 billion from Rajaratnam and employees, according to two people familiar with Galleon. Retaining clients and top managers may prove challenging as Rajaratnam fights the charges. At least two executive recruiters said they have already started talking to Galleon employees about moving to other hedge- fund shops.

“I suspect the super majority of assets will be redeemed,” said Ron Geffner, a lawyer at New York-based Sadis & Goldberg LLP, whose clients include hedge funds. “Certain portfolio managers and traders who have strong relationships with investors will find this an opportunity to start their own firms, or join other firms with assets in tow.”

To the extent that the taint is restricted to Raj, I’d think the rest of the Galleon people should be able to move on. I hope so.


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2 responses to “Abandon ship

  1. Anonymous

    Birds of a feather and all that

    No one smart wants to work for a moron who was a ?Chase lending officer before Wharton MBA (after some crappy undergrad) and who had to work as an equity analyst at Needham through the ’80s and ’90s (no one smart chose to be a low-paid research analyst back then, unless they couldn’t get a job as a trader or M&A banker at a real IB)

  2. pulled up in OG

    “Well, who’s an idiot now? Apparently Rajaratnam, who had been tipped off that one of his contacts was wearing a wire, had a ticket to Switzerland for October 22. We guess he won’t be making his flight.”