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Raj Rajaratnam’s Galleon Hedge Fund Might Not Survive Past January 1st, 2010

Posted on | October 20, 2009 | No Comments

Raj Rajaratnam’s Galleon Hedge Fund is going to find it very hard to survive through January 1st, 2010 because many large investors are taking their money out of the hedge fund.  Redemption requests are currently at $1.3 billion and could increase as many analysts have stated that many portfolio managers will use this opportunity to start their own firms or join other firms.  Galleon Hedge Fund currently has $3.7 billion in assets but about $1 billion of that is from Rajaratnam and employees.

If the redemptions continue to climb it is highly unlikely that the Galleon Hedge Fund group will be able to survive through next year.  The company has stated that they are going to continue to run the business as usual but that is almost impossible with the founder being changed with insider trading and over $1 billion in redemption requests.  The major issue at hand is that Raj was a strong #1 for this company but there are very few replacements to take the reigns to his ability.

Currently, investors of Galleon’s technology fund can withdraw their money on a monthly basis but the firm’s other funds can only be liquidated every quarter with a 45 day notice.  It will be very interesting to see how much money is taken out of the Galleon Hedge Funds over the next few months; in all reality they are going to find it very difficult to keep clients and run their business as it once was.

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Author: Mike Garner

Category: Current News

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