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SAC Capital soars above scandal to rake in returns

A criminal indictment can’t crush SAC Capital Advisors, at least when it comes to what’s most important in Hedgeworld: returns.

Steven A. Cohen’s hedge fund was up about 13% this year as of last Friday, thanks to an especially smashing September, a source tells Reuters.

That’s more than three times better than the average hedge fund, which was up about 4% on the year through August, seriously slumping the broad S&P 500 stock market index which jumped about 15% during the same period.

Then again, SAC’s proven to be anything but average in recent months.

Federal prosecutors indicted the firm in July, claiming cheating by traders there was “substantial, pervasive and on a scale without precedent in the hedge fund industry.”

Cohen wasn’t charged criminally, even as eight current or former employees of SAC were hit with insider trading charges. Six have already pleaded guilty.

The Securities and Exchange Commission sued Cohen personally, alleging he failed to supervise the two employees who are still facing trial: Mathew Martoma and Michael Steinberg.

SAC agreed in March to pay a record $616 million fine and settled two civil insider trading cases brought by the SEC.

But that taint’s not enough to tarnish SAC’s track record or crunch Cohen’s own coffers.

With a net worth of $9.4 billion, Cohen ranks as America’s fifth wealthiest hedge fund manager and remains one of 28 hedge fund managers to make this year’s Forbes 400.

Now rumor has it that federal prosecutors have proposed settling the criminal case against SAC for $1.5 billion to $2 billion.

Even that hefty fine wouldn’t be enough to knock Cohen off the billionaire’s block.

What You Can Learn from Top Bankers (eFC)

“You need a reasonable amount of intelligence, but you don’t need to be that clever to manage people.” Words of wisdom from Martin Gilbert, CEO, Aberdeen Asset Management and 18 others to help you rise to the top.

Goldman to Buy $21.6 billion Deutsche Business (Pensions & Investments)

Goldman Sachs Asset Management said it has agreed to buy Deutsche Bank’s stable value business in a push to expand its defined contribution business. The deal builds on GSAM’s acquisition last year of stable value money manager Dwight Asset Management from Old Mutual Asset Management.

ICAP Employees Accused in Libor Scheme (Bloomberg)

U.S. prosecutors have charged three former ICAP employees were in a scheme to manipulate Libor. The interdealer broker has been fined $88 million in a five-year international probe of rigging of benchmark interest rates.

Hedgies Want Summers to Head Fed (CNN)

It’s little surprise that billionaire hedge fund managers want Wall Street insider Larry Summers to helm the central bank. "I think the process, specifically talking about Larry Summers and the decision not to move forward with him as Fed chairman, is horrendous," said Glenn Dubin, CEO and chairman of Highbridge Capital.

BlackRock Plucks NewSmith AM Fund Manager (Fundweb)

New York-based BlackRock has appointed NewSmith Asset Management fund manager Mark Wharrier as director and portfolio manager. Wharrier will co-manage the £605 million BlackRock UK Income fund and the £44million BlackRock Income & Growth Trust alongside Adam Avigdori.

New York Life Expands into Europe and Australia (WSJ)

New York Life Investments agreed to pay €380 million ($512 million) for struggling Franco-Belgian lender Dexia SA's asset-management unit. It’s the latest asset sale by Dexia, which has been shoring up funds to repay government bailout money.

High-Flying Perks for Hedgies (4-Traders)

Your company may not own a private jet, but that doesn’t mean you can’t fly in high style. The Hedge Fund Association has formed a new exclusive partnership with Virgin Atlantic that gives members preferred rates, access to exclusive clubhouses and a wide range of perks for both frequent and occasional hedge fund travelers.

Buzz Around the Office

Slither in Style (BuzzFeed)

Missed Fashion Week? No worries. Here’s the accessory that will give you a cold-blooded edge in dealmaking. Snake makes the man.

List of the Day: Say This in an Interview

It takes more than a rock star resume to win a job. Here’s some basic advice on what to say to ace an interview.

  1. “I’m flexible.” Don’t be rigid when it comes job duties, a potential start date or even timing for the second interview.
  2. Company keywords can score you big points. Familiarize yourself with the website and literature so you can master the inside language.
  3. Don’t say “I don’t know.” Saying “That’s a Good Question” can win you some time to think of an answer while stroking the interviewer’s ego.


AUTHORNatasha Gural Insider Comment

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