Unstructured Finance

The new guy sitting at Steve Cohen’s side

By Matthew Goldstein

SAC Capital industrials trader Charles Simonian is getting a new job–one that’s very close to Steve Cohen.

The SAC Capital founder is moving Simonian onto his own small team of traders and analysts at the $14 billion firm, say sources. Simonian will work with Chandler Bocklage in overseeing trading in industrial sector stocks for the so-called Cohen Account–a portfolio that manages between $2 billion and $3 billion in gross exposure to the market. (Gross exposure includes the value of long and short positions).

The move comes as SAC Capital ended 2011 posting an 8 percent gain.

As previously reported on Reuters’ Unstructured Finance,  the top performer at Cohen’s fund was consumer products portfolio manager Gabriel Plotkin. His team of half-dozen traders and analysts manages about $1.2 billion of the firm’s money and has generated between $150 million and $200 million in trading profits.

People familiar with SAC Capital say the other 90 some odd portfolio teams, including the Cohen account, produced smaller trading profits in 2011.

In bringing Simonian onto his team–sometimes referred to as simply “COHE” within the firm, it appears Cohen is trying to add some trading muscle to his squad.

SAC Capital: a look back in time

By Matthew Goldstein

The full year numbers aren’t in, but it appears Steve Cohen’s SAC Capital had a pretty good year–especially compared to most other long/short equity hedge funds which lost money. But how does this year’s 8% gain stack-up against other strong years posted by the Stamford, Conn. hedge fund?

As we reported previously on UF, a good chunk of SAC Capital’s trading prowess in 2011 is being credited by sources to a single team led by Gabe Plotkin. His $1.2 billion book is one of the largest at SAC Capital and has generated between $150 million and $200 million in profits.

Indeed, only Cohen’s own 2 billion book–called the “big book,” the “Cohen account,” or simply “COHE”–is believed to manage more money at the $14 billion fund.

The guy who is killing it at SAC Capital

By Matthew Goldstein

Move over Steve Cohen. The trader who is killing it at Cohen’s $14 billion SAC Capital Advisors this year is Gabriel Plotkin.

The portfolio manager, who specializes in consumer products and the gaming and lodging industry, is one of the top producers this year at Cohen’s hedge fund, say several people familiar with the Stamford, Conn. hedge fund. Plotkin, who joined SAC Capital in late 2006 from North Sound Capital, is emerging as on Cohen’s most reliable money men.

At SAC Capital, where most portfolio managers run books that range from as little as $250 million to $500 million, Plotkin manages one of the largest. His team of half-dozen traders and analysts manages about $1.2 billion of the firm’s money, say sources.

John Thaler’s JAT thaws some more in December

By Katya Wachtel

John Thaler’s hedge fund, JAT Capital, had a meteoric rise through much of 2011, generating a 38 percent return at its peak in early September.  Since then, Shumway Capital alum has ebbed, though he’s still beating a ton of his competitors.

Through December 16, JAT fell 1.2 percent, according to an investor.

The fund remains up 14 percent year-to-date though, and given the average hedge fund was down about 4.4 percent through November, JAT investors have something to smile about. Though they have less to smile about than they did a few months ago.

Others are grimacing, since many of the industry’s heavy-hitters have taken a beating this year. It’s no secret that stars like John Paulson,  Mark Kingdon and Lee Ainsle are sustaining double-digit losses. Through December 16,  Paulson’s Advantage Plus fund is down 52 percent year-to-date; Kingdon’s Offshore fund is down about 19 percent; and Ainslie’s Maverick Fund is off about 15 percent.

Steven Cohen in his own words

By Matthew Goldstein and Jennifer Ablan

The thing about deposition excerpts—even lengthy ones—is that some of the tantalizing material gets left on the cutting room floor. And that’s certainly the case with hedge fund billionaire Steve Cohen’s two-days worth of  testimony in the long-running Fairfax Financial litigation.

Now don’t get us wrong—there is plenty of great and illuminating stuff in the 242 pages of deposition testimony Reuters obtained through a court motion to unseal documents in the civil lawsuit. As we noted in our story, Cohen is pressed at great length for his views on insider trading—he thinks the laws are “vague”. And as we highlighted in our blog, there’s even an amusing little feud between the lawyers over how the SAC Capital founder should addressed.

Still, it makes you wonder what was said by Cohen in the more than 400 pages of deposition transcript that wasn’t unsealed. And we’d love to see Cohen on videotape as sometimes body language can be revealing.

Stevie Cohen Unplugged

By Jennifer Ablan

Steven A. Cohen, one of the world’s most successful and secretive billionaire hedge fund managers, shared some of his thinking on insider trading, something his worst critics have alleged SAC Capital knows a thing or two about.

Cohen in sworn deposition testimony earlier this year, an extended excerpt of which was obtained by my prolific colleague and partner-in-crime Matthew Goldstein, said: ”The way I understand the rules on trading on inside information, it’s very vague.”

Cohen added: “It’s my belief that the idea of material nonpublic informing could be interpreted differently, depending on which side of the transaction you’re on.” At one point, the 55-old-trader loses his cool a bit with Fairfax’s lawyer, Michael Bowe, commenting: “Well, you know, we’re having this conversation for about three hours about what’s material and whatnot. It’s pretty clear that you and I have a different view on it.” 

Steve Cohen’s forbidden transcript

By Matthew Goldstein

Hedge fund titan Steve Cohen is taking steps to appear more open these days.  Over the past year or so, he’s been showing up at industry conferences, charity events–even allowing himself to be photographed with his wife for a glossy spread in Vanity Fair magazine.

But there are some things the SAC Capital founder is drawing a line in the sand over when it comes to greater transparency, including some of his own words.

Cohen and his legal team are fighting hard to keep hours worth of deposition testimony that he recently gave in a civil lawsuit  under wraps. Last year, the billionaire trader sat for a deposition in the long-running stock manipulation lawsuit filed by Canadian insurer Fairfax Financial against SAC Capital and other hedge funds, including Dan Loeb’s Third Point and Jim Chanos’ Kynikos Associates.

Grassley the inquisitor

Sen. Chuck Grassley wants to know what the Securities and Exchange Commission did with complaints it received about potential improper trading by Steve Cohen’s SAC Capital.

But Grassley’s request that the SEC provide an official accounting for its actions seems a bit odd, given that securities regulators recently settled an insider trading case with former SAC Capital analyst Jonathan Hollander.

With federal prosecutors continuing to look into allegations of improper trading at Cohen’s fund, it’s hard to make the argument that SAC Capital hasn’t been investigated. Indeed, Reuters first reported in December 2009, that as far back as 2007 FBI agents have been looking into allegations of improper trading at SAC Capital.

  •