If you're one of the few money managers who end up getting money into Stamford Harbor Capital when it opens its doors on midnight, January 1st, 2018 (or thereabouts), know one thing: this is not a right, but a privilege. Steve Cohen doesn't have to invest money on behalf of you ingrates. He was perfectly happy running his “family office” in the peace and tranquility of the Connecticut coast.
But destiny has other things in mind, so he's returning to the game, bigger and badder than ever. So don't make the mistake of thinking you can just treat him like any other securities-law-violating-ex-ex-hedge-funder. Forget 2-and-20 or whatever hedge funds charge nowadays – this sucker's going for 2.75-and-30. And while Cohen would really prefer that you never deal him the insult of asking to withdraw your assets from his wise stewardship, he's willing to compromise a smidge when it comes to lockups:
The terms being discussed for Cohen’s new fund -- which he could launch as soon as Jan. 1, when his ban on trading outside money expires -- include locking up capital for one to three years, according to people familiar with the matter. During that time, regardless of how the fund performs, clients won’t be able to withdraw their money without paying an additional fee, said the people, who asked to not be identified because the information isn’t public.
One could have imagined Cohen going a different route with his first public fundraising since SAC Capital pleaded guilty to insider trading and SAC himself accepted a three-year stay in the penalty box. He could have made his fees competitive, offered generous lockup conditions, and penned a self-reflective Medium essay about all the ways he's grown since his bad old Black Edge days.
Ha, ha. Steve Cohen is still Steve Cohen, so why should investors pay anything less than Cohen rates and accept anything less than Cohen lockups? He's not damaged goods; he's just been dry-docked for a few seasons. Offering discounts to entice investors into Stamford would signal that somehow, something essential in Steve Cohen has been compromised. But no, Stevie is stronger than ever. Hand him a giant bag of money, wait three years, and see for yourself.