The founder of SAC Capital and one of the most powerful hedge fund managers in the business, Steve Cohen is almost as famous for his obsessive secrecy and his museum-like art collection.
Raised in a middle-class family in Great Neck—his dad worked in a dress manufacturing business—Cohen attended Wharton where he traded stocks between classes and whipped his friends at poker on weekends. In 1978, he joined Gruntal & Co. as a junior trader in the options arbitrage department. Cohen got off to a good start: He recorded an $8,000 profit on his first day of trading and was soon netting around $100,000 a day in profits for the firm; by 1984, he was running his own trading group at Gruntal and had established himself as the firm's star trader. In 1992, after more than 14 years at Gruntal, Cohen went out on his own, founding SAC Capital with $25 million in assets. The Greenwich-based firm now manages roughly $13 billion across nine different funds, generating average annual returns in excess of 30 percent.
One of the most respected and feared hedge fund managers in the business, Cohen is also one of the most influential, responsible for up to 2 percent of all Wall Street trading activity on a given day. Unlike some of his colleagues who are happy overseeing the big picture from a comfortable distance, Cohen remains a very hands-on trader: He oversees the action from his desk where he sits in front of eight flat-panels, managing a vast team of traders who sit on a football field-sized trading floor, all of whom can keep an eye on what Cohen himself is up to via a webcam stationed near his shoulder and displayed in a box on their computer screens.
Known for his disciplined trading approach and his tight ties to Wall Street—SAC generates tens of millions in commissions for the biggest banks in town—Cohen generated staggeringly high returns during the tech boom (68 percent in 1999 and 73 percent in 2000) and has maintained an average annual return of more than 30 percent since the firm was founded in 1992. But his performance as of late hasn't been nearly as impressive: In 2007, SAC's flagship fund only returned 13 percent. But his oversized reputation still allows him to collect an astounding 43 percent performance fee, as opposed to the industry standard of 20 percent. But if you've been wondering what to do with the money in your piggy bank and you're thinking of giving Stevie a call, well, you'd better have a pretty big piggy bank. His latest fund, launched in 2006, requires a minimum investment of $25 million.
According to Forbes, Cohen is worth $8 billion, making him the 36th richest man in America. Cohen is estimated to have pulled in $900 million in 2006 and more than $1 billion in 2007.
On the side
The legendary hedge fund manager has one of the largest and most-rapidly assembled collections of art in history, estimated to be worth some $800 million. Among his trophy pieces: His library sports a $52 million Jackson Pollock; an Andy Warhol and Roy Lichtenstein hang in the foyer; a Van Gogh and a Gauguin—which cost a total of $100 million—reside in the living room; and a Keith Haring sculpture stands out front. The rest of the home isn't exactly lacking in the art department: classic works by Monet, Degas, and Manet as well as more modern pieces by the likes of John Currin are scattered throughout. Cohen's only poor investment so far has been a work of art by Damien Hirst—a shark pickled in a tank of formaldehyde—that he snapped up for $8 million from Charles Saatchi in 2005: Alas, the creature has been molting ever since, and Hirst is in the midst of repairs. Thankfully, Cohen has plenty of people to tend to the tedious details. Uber-dealers like Larry Gagosian and Bill Acquavella do much of his bidding.
Extraordinarily secretive (some say paranoid), Cohen rarely grants interviews and current and former employees are forced to sign voluminous confidentiality agreements. Such is Cohen's clout on both Wall Street and within the art world that no one has stepped out of line. Indeed, until relatively recently Cohen had managed to avoid having photos of him circulating in the media and few people in the industry had an idea of what he looked like. That changed in 2006 when Cohen sat down for a Wall Street Journal interview and photo session. Turns out all the money in the world can't buy you looks: The 5'8" bespectacled, balding billionaire bears a passing resemblance to George Costanza and eschews designer clothes in favor of fleeces that bear the SAC logo. Equally unglamorous when it comes to his leisure time, he's said to be particularly fond of the grilled chicken sandwich at Top Dog, a hot-dog stand in nearby Cos Cob. Do ask first, though, before you try and snatch the bottle of ketchup away from him. Cohen is always accompanied by a burly bodyguard who chauffeurs him around in his silver-colored BMW.
David Ganek, who runs the fund Level Global, is a Cohen protégé and collects many of the same artists as his mentor. Adam Sender also learned the craft at SAC and collects contemporary artwork. Steve Feinberg worked with Cohen at Gruntal. Attorney Paul Roth has represented him numerous times over the years. Marianne Boesky, Bob Mnuchin, and Jeffrey Deitch have all sold him artwork. And Cohen sits on the board of the Robin Hood Foundation, along with Bob Pittman, Lloyd Blankfein, Richard Chilton, Dick Fuld, Jeff Immelt, Paul Tudor Jones, Dan Och, Diane Sawyer, Gwyneth Paltrow, and Harvey Weinstein, among others.
Cohen dispensed $13.8 million to various groups from his personal charity in 2006, including more than $7 million to the David Saltzman-led Robin Hood Foundation. (He made his largest donation to the non-profit—$15 million—in 2002.) In addition to sizeable contributions to Greenwich Hospital ($614,000), Brown University ($666,667), and Mount Sinai ($501,000), Cohen occasionally hands out smaller amounts, too: In 2005, he mailed in a check for $35 to Children's International. In 2008, he announced a $50 million gift to the Morgan Stanley Children's Hospital of New York-Presbyterian. The donation will fund a pediatric emergency department.
Cohen met his second wife, Alexandra (she goes by "Alex"), through a dating service after divorcing his first wife. They have a total of seven kids: four daughters, including a set of twins, and three older kids from their previous marriages. The family dog is named Johnny.
Cohen's home in Greenwich, which is located on a 14-acre walled estate, is a 31,642-square-foot, nine-bedroom palace, complete with a beauty salon, indoor pool, 20-seat movie theater, and full-size basketball court. He paid $14.8 million for the mammoth abode in 1998 and has since added a 12,000-square-foot-wing to it. The property also features a 6,734-square-foot ice skating rink (as well as a separate structure to house Cohen's very own Zamboni), two-hole golf course, and organic vegetable plot. In 2007, he purchased a weekend home on Further Lane in the Hamptons for $19 million. He later said the 9,000-square-foot, 10-bedroom property would only be a temporary abode until he found a more lavish estate on the ocean.
Cohen was set to buy Picasso's La Reve from casino mogul Steve Wynn for $139 million in 2006. Just before shipment, Wynn put his elbow through the painting and the sale was canceled.