While Steve Cohen made the news lately due to employees’ alleged involvement in insider trading, the hedge-fund manager has continued to do what he does best: make money.
SAC Capital International, Cohen’s flagship fund, was the world’s most profitable hedge fund in the first 10 months of 2012, earning $789.5 million for Cohen, 56, and his managers, according to Bloomberg Markets’ annual ranking of hedge funds.
SAC Capital International is No. 1 not because of performance; it ties for No. 86 on that measure, with a 10 percent return in the Markets ranking of the 100 top-performing funds. Rather, the fund earned the most money because Cohen charges some of the highest fees on Wall Street. While most funds impose a 1 to 2 percent management fee and then take 15 to 20 percent of the profits, Cohen levies 3 percent and as much as 50 percent, according to investors.
The fund manager, who’s largely an equities investor, has produced an average annual return of 30 percent since starting his firm two decades ago. He’s had just one money-losing year, 2008, when the flagship fund tumbled 19 percent. For calendar 2011, he and his managers shared $907 million. The hedge fund has been closed to new investors since August 2011.
In November, Cohen was for the first time directly linked to a case of insider trading after Mathew Martoma, a former SAC portfolio manager, was arrested.
Martoma, who worked at an SAC unit called CR Intrinsic Investors from 2006 to 2010, was charged in what US prosecutors call a record-setting insider-trading scheme that netted as much as $276 million in profits and averted losses for SAC Capital Advisors.