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Steve Cohen's Net Worth + How This Hedge Fund Powerhouse Thrived After an Insider Trading Scandal

Capitalism.com
|
May 10, 2020
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If you've been hanging around the finance world, you've likely heard his name and wondered about Steve Cohen's net worth and other details of his story. Founder of SAC Capital Advisors and Point72 Asset Management, Cohen is a prominent figure in the industry.

American investor. Hedge fund powerhouse. Billionaire. Philanthropist.

All these titles fit, and Steve Cohen has garnered some impressive accolades over the years. Just recently, he made the following lists:

  • Forbes Billionaires 2020
  • The Forbes 400 2019
  • Forbes The Highest-Earning Hedge Fund Manager 2018
  • TIME Rank 94 on most influential people 2007

In the following sections, we will be unpacking the financial giant that is Steve Cohen — who is he, how did he get where he is today, and what is Steve Cohen's net worth? 

How Rich is Steve Cohen?

Cohen's estimated net worth is around a whopping $14 billion, as of May 2020, according to Forbes. In the following sections, we'll be unveiling the mystery behind how Steve Cohen amassed his wealth.

How Did Steve Cohen Make His Money?

The story behind Steve Cohen's wealth spans across several decades. And it all started when his interest in investing sparked at a young age. 

According to Business Insider, his first experience with stocks was with his grandmother and his caretaker, who often talked about stocks and investing. This created a spark that lit his passion for finance and investing. Cohen mentioned how he would look at stocks in the newspapers his father read. He even spent time hanging out at brokerage firms. 

cohen's net worth

Unsurprisingly, this led him to pursue a career in the finance world. He obtained an Economics degree from the University of Pennsylvania's Wharton School of Business. Then in 1978, when he got a Wall Street job as a junior trader in Gruntal & Co. He was in the options arbitrage department, and he performed so well, they promoted him to manage his own group within the company.

Realizing he had a knack for what he did, Cohen decided to strike out on his own. That's when he founded SAC Capital Advisors (SAC being his initials) in 1992. The company was well funded, with $10 million coming from his own pockets and another $10 million from outside capital. Over the years, SAC Capital Advisors gained quite a reputation for being one of the best in the industry and managed $14 billion in equity.

Unfortunately, SAC Capital Advisors eventually closed in 2016 when the firm ran into serious legal issues with insider trading.

The Financial Scandal of the Decade

The widespread fame and success of SAC Capital Advisors reached its expiration date. In 2010, SAC Capital Advisors became the target of an insider trading investigation. 

Like the Roman Empire, Cohen's hedge fund firm came crashing down. In 2013, the court found SAC Capital Advisors guilty of insider trading charges and a failure to supervise the traders involved in this scandal properly. 

Interestingly, Cohen was never charged with these crimes. According to Business Insider, it's because there was no substantial evidence showing Cohen was aware of illegal practices within his firm. Instead of pursuing Cohen directly, they targeted his business. Still, he had to pay dearly after this investigation closed:

  • Pay $1.8 billion in penalties. 
  • The firm officially closed in 2016.
  • Moreover, Cohen was banned from managing investors' money for two years.

While life was likely comfortable for him in his many multi-million dollar homes, Cohen did not quit. In 2018, Cohen founded Point72 Asset Management, continuing the same work he did under SAC Capital Advisors.

Steve Cohen's Personal Life

Steve Cohen has been adamant about keeping a lid on his personal life. He values his and his family's privacy, which is why he is rarely open to interviews. Here's what we could learn about the wildly successful but media-shy Ste Cohen.

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Where Did Steve Cohen Grow Up?

Steven Cohen was born on July 11, 1956, in Great Neck, NY. He is the third child of seven brothers and sisters. His father worked in dress manufacturing, and his mother was a piano teacher. 

Steven A. Cohen Education 

In 1978, Cohen obtained his economics degree from the Wharton School at the University of Pennsylvania. On a less academic level, Cohen took a liking to poker tournaments. This game taught him early on the value of taking calculated risks.

Where Does Steven Cohen Live?

This answer would probably vary depending on which home he's living in. Like many billionaires, Cohen owns several properties. Cohen's primary residence is in Greenwich, Connecticut. There he lives in a 35,000 square feet home on a 14-acre estate but also owns properties in New York and California.

On an additional note, reports say Steven Cohen's net worth makes him the second richest resident of Connecticut, succeeded by the legendary Ray Dalio, a fellow hedge fund manager.

Steve Cohen's Wife

Steve Cohen was first married to Patricia Finke in 1979 but then divorced in 1990. He later remarried in 1992 to Alexandra Garcia, whom he met through a dating service.

Steve Cohen's Children

Cohen has quite a large family. He had two kids from his first marriage with Patricia Finke. He later fathered four more children with his second wife, Alexandra Garcia.

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Hedge Fund Manager and… Art Collector?

Many consider Steve Cohen a financial genius. What you may not know is that Cohen is also quite the art connoisseur. He has collected several pieces of art. His art collection, rumored to top $1 billion in value, is impressive, to say the least. Within his collection, you can find pieces by:

  • Vincent van Gogh
  • Claude Monet
  • Jeff Koons
  • Gerhard Richter
  • Alberto Giacometti
  • Picasso

He was even once the proud owner of an Andy Warhol portrait of Mao Zedong. That is before he auctioned it off or a whopping $47.5 million in 2015.

Wealth, recognition, philanthropy, and culture — Cohen has turned out to be quite the multi-faceted man.

Is Billions Based on Steve Cohen?

Billions is an American television drama series that premiered on January 17, 2016. It follows the story of US Attorney Chuck Rhoades leading an investigation against hedge fund mastermind Bobby Axelrod for alleged unethical trading practices.

Sound familiar?

Yes, the plot of Billions is loosely based on the life of Steve Cohen. Bobby Axelrod found Steve Cohen inspiring, and the story draws on the investigation against SAC Capital Advisors for insider trading practices. 

How Much Did Steve Cohen Pay for the Mets?

Like many American youngsters, Cohen fell in love with the sport of baseball after attending his first game. The team he fell in love with, though, was the New York Mets.

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Cohen has actively followed the baseball team throughout the years and currently has an 8% stake in the team. If you've been following the Steven Cohen Mets negotiations, you might already know that he's trying to buy a larger stake of the team. He recently submitted a bid for $2.6 billion for an 80% stake in the franchise.

Unfortunately, the deal did not go through, according to The New York Times. "I'm very disappointed," Cohen says, "we couldn't work out a deal." One reason why the deal didn't work out might be that the Wilpon Family, managing owner, would not surrender control for five years after the sale closes. That's a lengthy waiting period, especially when you're paying in billions of dollars.

Still, the Wilpon family is seeking a buyer. And there are reports of other buyers putting their hat in the ring. The New York Post shows Alex Rodriguez, former Yankees superstar, is making moves to own a higher percentage of the New York Mets

Cohen has not commented on these updates, but don't count him out just yet. He is monitoring the situation, and he may return to the negotiation table sooner than you think. 

Who Are the Richest Hedge Fund Managers?

Business Insider has compiled a list of the wealthiest hedge fund managers. The top three on this list feature Jim Simons, Ray Dalio, and Steve Cohen.

Jim Simons founded Renaissance Technologies in 1982 with his partner Howard L. Morgan. Simons' reported net worth is $21.5 billion.

Ray Dalio founded Bridgewater Associates in 1975. His estimated net worth is reportedly $18.4 billion. 

Steve Cohen wins third place with his estimated net worth of $14 billion. Point72 Asset Management has $14 billion worth of assets under management.

cohen net worth

Who Will Be the First Trillionaire?

It's unclear who will win the race to become the first trillionaire. While Cohen boasts an impressive reported net worth, he does fall behind other notable figures. According to The Independent, Bill Gates might be the first to cross that finish line. He is currently $915.6 billion away from reaching the trillion-dollar mark.

Are Hedge Funds High Risk?

Hedge funds follow an investment structure that's a little different from when an individual buys stocks and bonds. Instead, hedge funds are companies that pool money from multiple investors and reinvests that money into the market. 

The firms tend to be high risk, but as the saying goes: the greater the risk, the greater the return.

It's this philosophy of taking high but calculated risks that financial powerhouses like Cohen, Dalio, and Simons have risen to the top in the financial industry.

Who is the Largest Hedge Fund?

According to Investopedia, the largest hedge fund is Bridgewater Associates, founded by Ray Dalio. Bridgewater Associates commands $160 billion in assets as of February 2020.

Following Ray Dalio is James Simons with Renaissance Technologies. This hedge fund commands $68 billion in assets under management.

Unsurprisingly, these two individuals take the lead when it comes to the largest hedge fund. Both Dalio and Simons, after all, have made the list of the wealthiest hedge fund managers. They have the experience and skills needed to build a wildly profitable hedge fund firm. 

The Takeaway

To close off this profile on Steve Cohen's net worth (estimated), here's a quote from his interview with Vanity Fair:

"There's a lot of other things I can do. I don't have to sit at the desk. Seriously, I've got nothing left to prove. I've been doing this 33 years, I've been to the top of the mountain, and there's not much there. My dream is to liberate myself. So is that a midlife crisis? Or is it just being . . . smart? I don't know. But it's exciting."

Steve Cohen has certainly accomplished many of the goals he set out when he was younger — success, wealth, family.

What about you?

Cohen mentioned how the top of the mountain is lonely. Are you prepared to put in the work to achieve greatness?

The mountain peak awaits you, and you don't have to make your journey alone. In fact, we've created a free training that'll help you on your way. Check it out here and start building your business, investing the profits, and creating the change you want to see in the world.

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