Tuesday, 16 September 2014
Last updated 4 hours ago
Jun 30 2014 | 9:54am ET
A former top SAC Capital Advisors executive is set to launch his own hedge fund with up to $1 billion in initial assets later this summer.
Solomin Kumin, who served as chief operating officer at the troubled hedge fund, now a family office, is in talks with several possible partners. The most advanced discussions are with Leucadia National Corp., which is likely to invest about $400 million in Kumin’s new firm in exchange for a substantial ownership stake. A deal hasn’t been finalized, but moved forward over the past week with discussions of investment size and profit-sharing.
All told, the firm—which does not yet have a name, but which is likely to carry a moniker related to Nantucket, Mass.—is expected to debut with between $800 million and $1 billion, making it one of the largest hedge fund launches of the year.
Kumin resigned from SAC in November, just weeks after the firm pleaded guilty to insider-trading charges as part of deal that saw it agree to cease managing outside capital, and left in January. At SAC, Kumin was seen as a close confidant of firm founder Steven Cohen, with whom he served on the committee that allocated money to portfolio teams—many of which he had a hand in recruiting and building.
“I’ve enjoyed the past five months with my family,” Kumin told The Wall Street Journal. “I’m looking forward to getting back into the hedge fund business in September.”
The new fund will have offices in Boston and New York. Kumin will serve as CEO and has already found a second founding partner, an unidentified senior risk official at another hedge fund. In addition, Kumin plans to institute an unusual compensation structure, in which portfolio managers pool a portion of their profits to help fund compliance efforts.
Kumin is also looking ahead to a time when his portfolio managers will wish to follow him in striking out on their own, with plans to seed such managers in the future.
Leucadia, which bought Jeffries Group last year and which already owns hedge-fund seeder Topwater Capital, is also a major investor in Harbinger Capital Management founder Philip Falcone’s permanent capital vehicle, Harbinger Group.
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