Cohen's SAC ends life as hedge fund with double-digit returns

Tue Dec 31, 2013 2:10pm EST
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By Svea Herbst-Bayliss

BOSTON (Reuters) - Billionaire investor Steven A. Cohen's SAC Capital Advisors is ending its life as a hedge fund with a 20.10 percent gain this year, marking one of the industry's best returns even after SAC pleaded guilty to insider trading charges, a source familiar with the numbers said.

Cohen reported the number to outside investors on Monday as he prepares to stop managing money for wealthy clients after his firm last month agreed to plead guilty to insider trading and pay a $1.2 billion penalty. One of the conditions of the plea agreement is that Cohen must wind down the business of managing money for outside investors.

The fund said it gained a net 1.88 percent between December 1 and December 27, the source said.

A spokesman for the fund declined to comment.

The number, although not final for the year because it does not include returns made on the last two days of the year, puts SAC among the $2.5 trillion hedge fund industry's best performers for 2013.

While the Standard & Poor's 500 Index has gained 29 percent this year, the average fund rose only 6.52 percent, according to data from Hedge Fund Research.

The returns, possibly the last that outside investors with Cohen will see, are sure to mark a high point in an otherwise tough year for SAC. The $1.2 billion fine SAC will pay is in addition to a $616 million settlement the firm reached earlier in the year with the U.S. Securities and Exchange Commission.

Cohen, 57, himself has never been accused of criminal wrongdoing. He does face charges of failing to properly supervise his employees in a civil case brought by the Securities and Exchange Commission.   Continued...

An exterior view of the headquarters of SAC Capital Advisors, L.P. in Stamford, Connecticut July 25, 2013. REUTERS/Michelle McLoughlin