Steven Cohen is hoping to raise $20 billion for a new fund he plans to launch soon after his ban on managing outside money expires in January 2018, the Wall Street Journal reports.
If Cohen is successful, it would be the largest hedge-fund launch on record. The sum would exceed the $16 billion his former firm, SAC Capital, managed at its peak – before the Securities and Exchange Commission forced him to shut it down and accept a four-year ban from the industry. Though, as WSJ notes, most – if not all – of Cohen’s $11 billion family fortune would likely be rolled into his new fund.
Raising such a sum would be “a show of resilience for the Wall Street veteran after years of legal fights,” The WSJ said. Government investigators eventually convicted eight of his former employees of securities fraud, but Cohen himself escaped prosecution.
But even if Cohen succeeds in meeting his target raise, it’s difficult to imagine how he’ll replicate his past market-beating performance without relying on some of the same tactics that initially attracted the Feds’ attention.
If his family office's recent returns are any indication, his fund might not be able to manage anything more than treading water.
As WSJ reports: Mr. Cohen, 60, has been overseeing his $11 billion family fortune at Point72 Asset Management LP, a 1,000-employee operation in SAC’s former Stamford, Conn., offices where Mr. Cohen’s desk sits at the center of the trading floor. While Point72 has made money since becoming a family office, last year its overall investment performance was roughly flat, Mr. Cohen’s second-worst ever annual showing, people familiar with the matter said.
To that end, Cohen is planning something that would've been "unthinkable" at SAC: He's considering lowering his fees, which once totaled as much as 3% of assets and half of all profits. Cohen's success would be notable not just for him, but for the industry as a whole, which suffered tens of billions in outflows last year.
Last year, hedge fund investors pulled more than $70 billion, the industry’s highest annual outflow since the crisis.
Cohen's quest for outside capital has already lead him back to the high-society circuit.
As WSj reports, he appeared at a gala to benefit Lincoln Center in January. And during a visit to SALT last month, Cohen “hosted a private dinner for staff and industry executives and attended closed-door events with speakers and sponsors including onetime rivals like hedge-fund manager Daniel Loeb, people familiar with the matter said."