With the hype around this hedge fund billionaire, many investors and people from other spheres ask themselves the following questions: What is his Net Worth? How has Steve Cohen made so much money? Well, we have prepared the answers to these questions for you. So, keep on reading to find out how Steve Cohen has managed to build his empire.
Who is Steve Cohen?
You may not know information about his personal life, so let’s begin by explaining who Steve Cohen is. Steve Cohen was born on June 11, 1956. Cohen grew into a Jewish family in Newyork. Moreover, his father was a dress manufacturer, and his mother was a piano teacher. Also, he is the third child of seven brothers and sisters.
Cohen proved to be a good student in high school, often betting his money in tournaments. In 1978, he got an economics degree from the Wharton School. Further, when he was in school, a friend helped him open a brokerage account with $1,000.
Currently, Cohen is a hedge fund manager and an American investor. Also, Cohen is a philanthropist. Furthermore, Steve Cohen is the founder of the now-defunct SAC Capital Advisers, which, in fact, is one of the most renowned hedge funds. SAC Capital Advisors was launched in 1992. For years Cohen ran SAC Capital, which proved to be one of the most successful hedge funds ever.
In 2010, the company became the topic of an insider trading investigation launched by the Securities. However, Cohen was never charged. Unfortunately, he was forced to shut down SAC Capital after the firm pleaded guilty to insider trading charges that cost Cohen $1.8 billion in penalties. SAC was closed in 2016, but the ban on managing other investors’ money ended in January 2018.
Further, Steve Cohen has given $715 million to philanthropic causes over his lifetime, including causes related to veteran’s and children’s’ health. Furthermore, at the beginning of 2017, Cohen’s family office had about $11 billion. Moreover, his trading activities returned about 10% after costs and expenses during the year. Around the start of 2018, the firm earned nearly $3 billion of outside capital.
How Steve Cohen Made Billions of Dollars?
After just reading this information, you might be wondering how did he manage to make billions of dollars? Well, when learning about Cohen, people should remember a few essential facts about him. These facts helped him to get to where he is today.
First, Steve Cohen worked efficiently and with allegiance. Also, he invested his money and took risks in trading fearlessly. Further, he started his career at quite a young age, which proved beneficial for him.
Also, after Steve graduated from the University of Pennsylvania’s Wharton School of Business in 1978 with a degree in Economics, he got a job at Wall Street. There, Steve Cohen worked as a junior options trader for boutique investment bank Gruntal & Co.
Six years later, Cohen managed to generate $100,000 a day for the firm. Of course, this helped him build substantial personal wealth.
In 1992, Steve Cohen launched the hedge fund SAC Capital Advisors. The company was founded with $25 million of Cohen’s own money. Thanks to the high-risk trades, the company was successful. To 2013, SAC averaged annual returns of 30% for its investors.
What is the Net Worth of the Hedge Fund Billionaire Steve Cohen?
As the founder of Point72 Asset Management, Steve Cohen has managed to build substantial wealth over the years. As of 2019, the net worth of the hedge fund billionaire Steve Cohen was estimated to be US$13.6 billion.
Also, Steve Cohen oversees Point72 Asset Management. This is a $13 billion hedge fund firm that restarted managing outside capital in 2018. Further, Steve Cohen appears on three of the Forbes lists.
In 2019, Steve Cohen took 35th place on the Forbes 400 list. Also, he one of the wealthiest people in the world – #101 Billionaires 2019. Further, he was #8 amongst The Highest-Earning Hedge Fund Managers in 2018 but dropped off in 2019.
Legal Trouble of Steve Cohan
SAC had declared a $700 million long position in pharmaceuticals Elan and Wyeth in 2008. These were in the joint development of a drug to treat Alzheimer’s disease. Later, the stocks plummeted when the second phase of clinical trials came with negative results. On the other hand, Steve Cohen made millions from this stock downfall. One week earlier, he shorted the stocks and earned a profit of $275 million.
Later, the SEC indicated Mathew Martoma on charges of insider trading in 2012. They accused Martoma of having inside information about the Elan and Wyeth clinical trials. Moreover, the SEC alleged that Martoma used that information to advise Steve Cohen to sell out of the position.
Moreover, the United States attorney who brought charges against Martoma referred to the incident as “the most lucrative insider trading scheme ever.” Martoma was announced guilty. Meanwhile, Cohen was never charged. A civil suit claimed against him by the SEC for failing to supervise a senior employee was dropped in 2013. During the same year, SAC Capital was also charged and pled guilty to insider trading.
Furthermore, SAC Capital had to pay $1.8 billion in penalties. However, the settlement also included terms that barred Cohen from managing the assets of other investors. He changed his investment operations from SAC Capital to Point72 Asset Management in 2014. Last year, in January 2018, the firm was granted clearance to raise and manage outside capital.