|  | | 2009 News and Press Releases | | |
HEADLINE NEWS:
Galleon to Liquidate Funds; Said Approached on Assets
Saijel Kishan
Bloomberg. October 21, 2009
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EXCERPT: Raj Rajaratnam, the billionaire founder of Galleon Group charged last week by federal prosecutors with insider trading, told investors he will liquidate his hedge funds. Galleon, which managed about $3.7 billion, is exploring various alternatives for the business, according to a letter sent to investors today. New York-based Galleon has been approached by unidentified parties interested in buying the company and an undetermined amount of its assets, according to a person familiar with the firm.
“I want to reassure investors of the liquidity of our funds and assure Galleon employees that we are seeking the best way to keep together what I believe is the best long/short equity team in the business,” Rajaratnam, 52, said in the letter. “I want to reiterate that I am innocent of all the charges.” Rajaratnam, one of six people arrested Oct. 16 for alleged insider trading, is free on $100 million bail. Within three days of his arrest, investors asked to withdraw about $1.3 billion from Galleon, which managed $7 billion at its peak last year, the person said. Founded in 1997, Galleon was one of the three largest managers of technology hedge funds along with Lawrence Bowman’s Bowman Technology Fund, which closed in 2001, and Daniel Benton’s Andor Capital Management LLC, which shut down last year. Redemption Requests “The redemptions coming in were likely so large, and no one wants to be the last out the door,” said Brad Balter, head of Boston-based Balter Capital Management LLC, which allocates investments to hedge funds and is not a Galleon investor. “As an investor, you don’t want that in your portfolio, even if the charges haven’t been proven.” Galleon doesn’t know when it will complete the liquidation process, which will follow the firm’s standard redemption policies, the person said.
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