Hedge fund billionaire Steven Cohen was banned from managing outside money until 2018 after an insider trading scandal swept through his former firm SAC Capital. Now, Cohen not only appears poised to return to the hedge fund industry, but to resume his place at the top.
Cohen is reportedly seeking to raise $20 billion for a new hedge fund set to open in early 2018, according to the Wall Street Journal Tuesday. That's not only more money than Cohen ever managed at his previous hedge fund SAC Capital, which peaked at $16 billion, it would also represent the biggest U.S. hedge fund launch to date, according to the Journal.
The fundraising would be the surest sign of a comeback for the 60-year-old, who has demurred on questions about a comeback in recent years. SAC Capital shuttered its doors in 2013 after pleading guilty to insider trading charges and paying a $1.8 billion fine. Cohen was barred from managing outsider money as part of a settlement with the Securities and Exchange Commission last year, which had charged the investor with failing to supervise his firm's employees.
Since then, Cohen has been managing mostly his own $11 billion fortune via his family office, Point72 Asset Management. Still, rumors of a comeback have surrounded him, and many investors believe Cohen will return to hedge funds the first chance he gets, Fortune reported in a recent profile of the trader.
"You always want to create options for yourself," Cohen told Fortune in an interview in 2016. "Right now I’m a family office and enjoying it, and 2018, we’ll figure it out when we get there. When we cross that bridge, we’ll get to it."
Cohen also revealed his indirect ownership of a new fund called Stamford Harbor Capital in 2016, which reported about $105.7 million under management in its most recent disclosure. Stamford Harbor is thought to be a precursor to Cohen's return to the hedge-fund world.
Though with seven months to go until the new year, the report that Cohen is seeking to raise outside funds conflicts with previous statements put out by Stamford Harbor, saying the decision to accept outside money would not be made until 2018.
"While Stamford Harbor could currently manage outside money, it has chosen not to do so and instead to defer that decision until 2018," a spokesperson said in a statement back in October.
At any rate, Cohen's return has been highly anticipated, with investors hoping he can replicate his starry past performance of 29% annual returns at SAC Capital. But Point72 Asset Management's most recent returns have been lackluster, gaining just 1% in 2016 as the S&P 500 rose over 9%, according to Bloomberg.
Stamford Harbor Capital declined to comment Tuesday.