As Steven Cohen geared up to turn his hedge fund firm, SAC Capital Advisors, into a family office by returning all outside funds, we had been led to believe he would end up with about $9 billion in assets.
However, a new regulatory filing made by Cohen’s SAC Capital Advisors discloses the firm had quite a bit more than that.
In the regulatory filing dated March 31, SAC said it had more than $11.9 billion as of February 1, or $11,919,900,000 in net assets to be exact.
In the same filing, SAC stated that all outside funds were returned by January 31. “Only Mr. Cohen’s relatives, certain employees of the Cohen Family Office and entities controlled by them will be eligible to invest with the Cohen Family Office,” the filing added.
The filing goes on to disclose that SAC redeemed the remaining fund investors that do not qualify to invest with the family office as of January 31, 2014, “other than with respect to certain limited illiquid investments, which SAC will continue to manage for the near future.”
So, it seems there is roughly $3 billion more in the firm than many thought there would be at this stage.
What accounts for the difference? Does Cohen personally — including close family members — have several billion dollars more than we had been led to believe?
Neither Cohen nor anyone else at the firm would comment.
According to a knowledgeable source, however, the $11.9 billion includes a roughly $1.8 billion fine the firm owes to the government, which has not yet been paid.
Also, some of the difference may be due to last year’s 20 percent or so net return that presumably swelled the $9 billion figure. That figure, however, was widely reported earlier this year, so last year’s return is probably a small part of the discrepancy.
Rather, the asset differential could reflect what may be a sizable and much bigger pool of illiquid assets sitting in side pockets than SAC had previously disclosed. It’s not known what the specific investments are in these side pockets.
In any case, there does not appear in any previous public accounts any mention of this large side-pocket portfolio, on top of the widely quoted $9 billion or so figure.
