Morning Coffee: It Still Pays to Work at SAC
Working at Steven Cohen’s SAC Capital Advisors has its disadvantages. The Connecticut firm is a pressure-cooker that’s known to churn through traders on a routine basis, with Cohen himself applying much of the day-to-day stress.
One former employee, speaking to the New York Times, recently compared working at the firm to “The Hunger Games,” where traders are pitted against each other, leaving only the strongest to survive. Oh, and then there’s that pesky insider trading probe that, while yet to take down Cohen himself, has at least one former foot soldier starring down the crosshairs.
So why would a trader subject themselves to the punishment doled out at SAC Capital Advisors? The answer is money, and lots of it.
Cohen’s flagship fund, SAC Capital International, was the world’s most-profitable hedge fund through the first 10 months of 2012, earning nearly $800 million for Cohen and his staff, according to Bloomberg. And we’re not talking returns; the $789.5 million represents just the fees earned during that time.
The fact is SAC Capital International barely made the list of the top 100 hedge funds based on performance during that span, tying for 86th position, according to Bloomberg. Cohen and his traders added to their bankrolls mostly due to the exorbitant fees the firm charges, often doubling those of competing funds. And SAC isn’t begging for investors; the fund hasn’t taken on any new clients since August 2011.
So while working at SAC may, at the very least, give you an ulcer, it will likely make you very, very rich.
The best-performing hedge fund of the first 10 months of 2012, among those managing more than $1 billion, was Deepak Narula’s Metacapital Mortgage Opportunities Fund, which booked a 37.8% return by investing mostly in agency mortgages.
David Sokol, a former top executive at Warren Buffett’s Berkshire Hathaway, will not be charged with insider trading following a lengthy investigation. Sokol resigned from Berkshire Hathaway in 2011.
The U.S. economy added 155,000 jobs in December, leaving the unemployment rate at a static 7.8%, according to the Bureau of Labor Statistics. Last week’s Moody’s/ADP report found the private sector added a more optimistic 215,000 jobs in December. Canada, meanwhile, added eight times more jobs than expected, baffling some analysts.
It Takes More than a Mouse (eFinancialCareers)
Simply adding to your connections is not networking. Real networking requires an investment of your time.
Switzerland’s oldest private bank has agreed to pay nearly $60 million in fines after admitting helping Americans evade taxes. Founded in 1741, Wegelin will reportedly close its doors after completing the guilty plea.
Citigroup and Barclays leapfrogged several other firms to end 2012 as the top two players in the U.S. equity capital markets, with a 12.2% and 11.1% market share, respectively.
Fallout Continues (Financial News)
Another J.P. Morgan trader linked to Bruno Iksil, the London Whale chiefly responsible for the firm’s nearly $6 billion trading loss, has left the firm. Julien Grout has also reportedly drawn the interest of U.S. investigators probing the loss.
Buzz Around the Office
Locked and Upright Position (Gothamist)
This is what happens when you’re drunk and unruly on a flight from Iceland to New York. Think duct tape.
List of the Day: Identifying Liars
Want to know which one of your co-workers is blowing smoke? Look for these three verbal indicators.
- A lack of specifics.
- Consistent use of superlatives.
- Avoidance of the word “I.”
