The Story of Steve Cohen, a Notorious Hedge Fund Manager

By Preet Singh

(Steve Cohen on the left, Damien Lewis on the right – the dude who plays ‘Bobby Axelrod in the show Billions [more on this later] – Image by Getty Images)

A few days ago, thanks to the GameStop saga, he was even forced to close his twitter account simply due to the backlash he received from New York Mets fans (he part owns the team after their previous owners went bankrupt during 2008 etc.) and other GameStop investors/ speculators.

This backlash was partially warranted, as he injected $750 million into another fund (Melvin Capital), run by his protege. Mets fans argued that this money could have been better invested if it was used to bid on free agents in the sport.

Currently, he is the founder of Point72 capital.

He initially started his career in 1978, and on his first day (from what we can gather) became a legend, at Gruntal & Co (the boutique firm he decided to initially work for). He brought in approximately $80,000 on his first day and from the information available, apparently consistently bought in $100,000 each day!

He started his own group within Gruntal & Co, by 1984 until he launched his own hedge fund later.

Although not much was known about SAC capital, the firm he would eventually start and run independently, what was known was this:

  • The temperature at all times was set to 70 degrees, no more no less.
  • All hard drives had to be stored off site so there was zero humming on site for the traders (no distractions)
  • Phones were not allowed to ring, only blink. No unnecessary distractions remember!
  • Rows and rows of employees wore SAC branded jackets, waiting for Cohen (who sat right in the middle of the trading floor) to give the order to ‘sell shares’.

In 1998 and 1999 SAC, his firm, delivered returns of 70% annually! 70 percent!

This is when SAC and Steve Cohen became household names in Wall Street and the likes. In 2000, his firm bet against the tech bubble and made another 70% during the crash!

Fun fact 1: He met his second wife, Alexandria Garcia, through an online dating service!

Fun (or weird) fact 2: He admitted on a Hispanic talk show, that until he was engaged to his wife Alexandria, he slept with his ex-wife frequently. Weird considering, well the fact is weird, but also since he is known to be a very secretive person this kind of ‘public admission’ is quite awkward and eyebrow raising, to say the least.

Fun fact 3: The show Billions is also loosely created around him, his firm and their antics. In the show, Billions, the billionaire Bobby Axelrod is loosely based on Steve Cohen. In the show, they have an in-house psychiatrist which is exactly what Steve Cohen did when he ran his firm SAC.

Many years ago, SAC Capital was charged with insider trading. In order to settle those charges, it admitted guilt and agreed to pay a $1.8 billion fine as well as agreeing to return all ‘outside investor money’.

Although Steve Cohen was not charged with insider trading himself, he was charged with ‘failing to supervise’ his traders. At the time, this violation alone was enough to potentially bar him from ever trading stocks or managing anyone else’s money again. As we all know, since he is now trading and a part of the GME saga, he was obviously allowed to start trading again – a move which infuriated many.

As part of the deal, SAC was shut down, $3 billion approximately was returned to outside investors and Steve Cohen was restricted to being ‘only able to trade his own funds’ from his family office (which was approximately $9 billion at the time from memory). He did not receive jail time. One of his portfolio managers however, disgraced trader ‘Mathew Martoma’ (who even lied about his degrees) did receive jail time.

Some other interesting facts:

He loves to collect art. He has been collecting art since 2000. If you watch the show Billions, Bobby Axelrod (the main lead who loosely depicts Steve Cohen) has the same love for art – interesting.

His collection is apparently worth over $1b. This is approximately only 1/14th of his net wealth today, give or take.

He used to beat his friends at poker, and today still is a self professed poker lover and player.

He is commonly known as ‘Stevie’ on the streets and hates that name (funnily enough, he probably gets called that, for that reason lol).

Weirder fact:

He may/ may not own a pig that’s been tattoo’d and known as ‘walking art’ (look it up, it’s not bs)

Who’s the SECOND most notorious hedge fund manager that I know of?

Ken Griffin – Steve Cohen, Point72 capital, teamed up with Citadel Capital’s owner Ken Griffin. My response to the ‘notorious fund manager’ question will end here, but if you want more, start looking into Ken Griffin. Interesting lad.

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