Officially, Steve Cohen is undecided about starting a hedge fund. Unofficially, he’s got marketers poised to sign up clients and take in money early next year.
ShoreBridge Capital Partners, the company hired last year to gauge interest in a such a fund, has told prospective clients to expect a trove of marketing materials in the next several weeks, according to people familiar with the plans. It will include due diligence documents, track records and other information investors need to decide whether they will pony up cash for the new firm, Stamford Harbor Capital.
It’s the clearest evidence yet that Cohen is planning a comeback after being barred from managing outside capital until Jan. 1, 2018. And it comes at an opportune time. The billionaire’s returns are just beginning to rebound after 18 months of barely making money at his family office, Point72 Asset Management. He’s now up about 5 percent year to date, according to people familiar with the performance.
Although most hedge fund investors expect billions to flow to the new firm, it’s less clear whether Cohen can regain his superstar status of about 30 percent annualized returns achieved when he ran SAC Capital Advisors. Since returning client money in the beginning of 2014, markets have become increasingly dominated by passive investing, a trend that many a stock-picker has blamed for lackluster performance. Cohen, 61, has also lost some seasoned portfolio managers when he became a family office.
“Markets have changed and there are still a lot of questions around how the new firm will be structured,” said Brad Alford, a former SAC investor who runs Alpha Capital Management, a consultant search service in Atlanta. “It remains to be seen whether he can rebuild to his former glory.”
Jonathan Gasthalter, a spokesman for Stamford Harbor, declined to comment. ShoreBridge didn’t return a call seeking comment.
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ShoreBridge, started by longtime SAC marketer Doug Blagdon, is telling investors that Cohen may raise from $2 billion to $10 billion -- “if” he decides to launch the fund, the people familiar with the plans said. And, the billionaire won’t take meetings to discuss his plans until after Jan. 1, one of the people said.
SAC pleaded guilty to securities fraud in 2013, and agreed to pay a record $1.8 billion fine and convert to a family office. Cohen wasn’t charged with wrongdoing. A Cohen spokesman said last year that Stamford Harbor wouldn’t seek external money before the terms of the settlement lapse.
While Cohen is clearly the star attraction of the new venture, ShoreBridge has been trumpeting the role of his lieutenant, Perry Boyle, who last year was named chief investment officer at Stamford Harbor, the people said. Boyle joined SAC in 2004, and was most recently head of discretionary investing at Point72 before he was shifted to Stamford Harbor, which has a mailing address adjacent to Point72’s Stamford headquarters.
Cohen’s plan for a comeback comes as the industry faces increased challenges. More hedge funds closed in 2016 than in any year since the financial crisis and lackluster performance and high fees have driven clients away. Fewer than a quarter of the 140 hedge funds surveyed by Preqin in June thought that investors had turned more positive on hedge funds over the past year.
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