A former top executive for Steven A. Cohen is testing whether a person needs experience as a trader to raise big dollars for a hedge fund.
Solomon Kumin, the former chief operating officer of SAC Capital Advisors, the former hedge fund owned by Mr. Cohen, is working toward starting his own fund later this year with the backing of several institutional investors, said a person briefed on the matter but not authorized to speak publicly. The unnamed fund is trying to secure backing from the Leucadia National Corporation.
Mr. Kumin, who worked for SAC, now called Point72 Asset Management, for nearly a decade, left the firm in January, a few months before a federal judge accepted the firm’s guilty plea to insider trading charges. Mr. Kumin, who was not accused of any wrongdoing, was responsible for business development and the recruitment of top portfolio managers. During his tenure, Mr. Kumin also played a big role in establishing SAC’s operations in Asia and sat in on operational meetings with Mr. Cohen and other top executives at the hedge fund, which managed about $14 billion last year before it began giving money back to outside investors..
But Mr. Kumin was not a trader himself. Traditionally, most hedge funds have been started by traders or groups of traders. It’s rare for the public face of a hedge fund to be someone who has not been one.
Mr. Kumin could not be reached for comment on Monday. A person briefed on the matter said Mr. Kumin was working closely with at least one other business partner in planning for the fund. This person said that Mr. Kumin’s connections in the $3 trillion hedge fund industry should give him the ability to recruit star traders if the firm attracts significant seed capital from institutional investors like Leucadia. A spokeswoman for Leucadia did not return a phone call seeking comment.
The Wall Street Journal, which first reported on Mr. Kumin’s plan, said he was seeking to raise up to $1 billion.
There is no indication that Mr. Cohen intends to invest any of his money with Mr. Kumin, who goes by the nickname Sol.
Point72, the successor to SAC, is being operated as family office that manages up to $10 billion of Mr. Cohen’s personal fortune. As part of its guilty plea, SAC and its successor firm agreed to stop managing money for outside investors. The firm paid a $1.2 billion penalty to federal prosecutors and an additional $600 million to securities regulators.
Mr. Cohen has already committed to provide up to $200 million to a hedge fund to be started by Gabriel Plotkin, a top consumer stocks trader at SAC who intends to leave Point72 at the end of the year. Mr. Plotkin manages about $1 billion for Mr. Cohen’s firm and has been one of the firm’s top-performing traders for the last several years.
Over the last six months, more than a dozen traders and analysts have left Mr. Cohen’s firm as it continues to deal with the fallout from the guilty plea in the insider trading investigation. Just recently, three traders left Point72’s office in Boston.