Steve Cohen, the billionaire who ran one of Wall Street’s most infamous hedge funds, is trying to stage a big comeback.
Less than four years after his old firm pleaded guilty to insider trading, Cohen is launching a new fund, reportedly with a goal of managing as much as $20 billion.
That’ll include $11 billion already in his family office, The Wall Street Journal reports, adding that Cohen plans to raise another $9 billion from outsiders.
If he does start with $20 billion, it would be the biggest US hedge-fund launch in history, according to the industry publication Absolute Return. But none of the investors and advisers Business Insider spoke with for this story said they’ve seen or heard a pitch yet.
Still, that Cohen, now 60 years old, would seek to run a hedge fund again has probably been the industry’s biggest open secret. Ever since the insider-trading allegations put one of his traders in jail and left Cohen barred from managing other people’s money until 2018, Cohen has been working on revamping his image.
Point72 Asset Management, which has been managing Cohen’s billions, quickly became known as the most public of family offices. He hired public-relations pros to shape the firm’s message, launched an investing academy for college grads, imposed a ban on hiring from a New York hedge fund that came under scrutiny, and brought on a former federal prosecutor to keep the fund in check.
That was all during a period in which he wasn’t legally allowed to accept outside capital. The Securities and Exchange Commission in 2013 barred Cohen’s SAC Capital from managing outside money after it pleaded guilty to insider trading. Cohen wasn’t personally charged. That ban lifts in 2018, following a settlement that ended charges that Cohen hadn’t properly supervised a portfolio manager, Mathew Martoma, who had engaged in the insider trading.
But raising $9 billion is a lofty goal for a hedge-fund manager with a storied past, both admired and reviled, depending on who you ask. People close to Cohen said they were surprised by the amount being sought, mostly because it’s tough to raise money, let alone a fund of that size.