Cohen Clarifies $150M Picasso Buy

Apr 5 2013 | 10:27am ET

SAC Capital Advisors founder Steven Cohen moved this week to elaborate on his purchase of a famed Pablo Picasso painting for a record price.

Word last week of Cohen's acquisition of "Le Rêve," coupled with his purchase of a new $60 million home in the Hamptons, came in the wake of SAC's $616 million settlement of insider-trading charges, leading to criticism of his timing. But Cohen didn't buy the Picasso as the settlement was being negotiated or in its immediate aftermath, his art adviser said, but in early November, prior to the arrest of former SAC portfolio manager Mathew Martoma on insider-trading charges and the Securities and Exchange Commission's lawsuit against the firm.

"The timing was bad," Sandy Heller said. "We're correcting the chronology."

Also corrected is the purchase price: Reports last week said that Cohen had paid casino magnate Stephen Wynn $155 million for the canvas, which depicts Picasso's mistress masturbating. The price was actually $150 million, The New York Times reports.

It remains, however, the most ever paid by a U.S. collector for a painting.

Cohen has coveted the 1932 canvas for years. He had agreed to buy it from Wynn in 2006 for $139 million, but shortly after the deal was struck, Wynn, who suffers from an eye disease, put a silver-dollar-sized hole in the painting with his elbow while showing it off in his Las Vegas office. Following restoration, the painting appraised for only $85 million, apparently not enough for Wynn to part with the Picasso.

According to Heller, the deal last year came together quickly. A Manhattan art dealer called Cohen in late October to tell him that Wynn was ready to sell. "We were at the gallery the next morning," Heller said. "In three minutes, we had a deal."

Heller said the damage is not visible in any way.

"We had to step back, take a deep breath and see how the restoration would turn out," he said. "This is a painting that has haunted Steve for nearly a decade."

"When you stand in front of it, you're blown away," Cohen told the Times.

Cohen is not the first hedge fund manager facing legal trouble to own the painting. Wynn acquired it in 2001 from Wolfgang Flöttl of Ross Capital Markets. Seven years later, Flöttl was sentenced to 10 months in prison for misuse of an Austrian bank's funds.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.