The inner circle of Republican mega donors now includes a prominent hedge fund manager who has been known to shy away from publicity, preferring instead to sprinkle his donations among both Democrats and Republicans.
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Billionaire hedge fund manager Steven Cohen, who after years of toiling with the government during its crackdown on insider trading, is on the verge of making a big splash and return to public fund business, while shoveling wads of cash into PACs controlled by the Republican Party, according to campaign finance records reviewed by FOX Business.
To be sure, Cohen's activities in the fundraising world still don't match those of other GOP stalwarts, such as Robert Mercer, another billionaire hedge fund manager. Mercer, who is best known for his financial backing of the far-right website Breitbart, has contributed more than $35 million to Republican causes since 2010 when the Supreme Court tore off fundraising limits from individuals to entities known as super PACs.
But Cohen’s contributions in recent years, and particularly in recent months, to super PACs dedicated to helping the Republicans retain congressional majority in the 2018 midterm elections has begun to raise some eyebrows in GOP circles, both for their timing as he prepares to re-launch his public hedge fund business, and their size, according to people with direct knowledge of the matter.
According to campaign finance records, Cohen has donated a total $2 million last year to the Senate Leadership Fund super PAC, which is dedicated to maintaining the GOP majority in the Senate, as well $1 million to the Congressional Leadership Fund, another super PAC to protect the GOP’s hold on the House. He is the top contributor to both funds, records show.
"Cohen is getting back into the hedge fund business, and he's making sure he has allies lined up on Capitol Hill given what he went through," said one financial services lobbyist who spoke on the condition of anonymity. "And it’s not like he's on a budget."
Jonathan Gasthalter, a spokesman for both Cohen and Mercer, declined to comment. for this story.
Cohen is one of the most storied investors of the 25 years, as his hedge fund SAC Capital consistently beat the market with outsized returns even after he took massive management and performance-related fees. During that time he accumulated a fortune worth approximately $13 billion, and unlike other fund managers like Bill Ackman and Dan Loeb, he largely shunned the limelight, except on occasion, when he was seen indulging his passion for expensive art or extravagant homes.
That all changed during the government's crackdown on insider trading, which began in 2009 and ended roughly in 2013 when SAC was shuttered after executives plead guilty to federal insider trading charges. Though Cohen himself had been a target of the criminal probe, he never personally faced insider trading charges. Instead, he faced a two-year civil ban by the Securities and Exchange Commission (SEC) for failing to supervise a person at his fund charged with insider trading.
During his hiatus from the-public hedge fund business, Cohen renamed his firm Pt.72 Asset Management, and maintained a fairly large staff of traders that managed his net worth through what’s known as a family office. But now that ban has ended, as FOX Business previously reported Cohen is on the verge of reopening his Pt.72 to the public -- mainly ultra-rich people and pension funds that qualify as hedge fund investors. He plans to manage around $5 billion of outside money, according to people who have spoken with some of Cohen’s top traders and portfolio managers.
It’s a sliver of the $15 billion that Cohen managed during SAC’s heyday before the insider trading crackdown, but people close to him say he wants to start slow, proving that his record wasn't merely a fluke or based on pushing the limits of the law.
Cohen, meanwhile, long known for keeping a low public profile has suddenly become less conspicuous as he prepares to re-enter the hedge fund world. Last year, he attended the SALT Conference, a popular hedge fund gala in Las Vegas attended by industry executives and could be seen mingling with the crowd and playing craps at the casino in the Bellagio Hotel. Just this week, representatives of his firm attended the World Economic Forum in Davos, Switzerland, where they hosted a wine party open to reporters. (A spokesman said Cohen was not in Davos for the event.)
And he’s making political moves as well that benefit the GOP. In 2008, for instance, Cohen was one of the top contributors to the Democratic Senatorial Committee, donating $57,000 while just $28,000 that year went to the National Republican Senatorial Committee.
But in 2009, Cohen and his hedge fund became targets of the U.S. Attorney for the Southern District, Preet Bharara, an appointee of President Obama and a long-time Democrat. With that, Cohen’s political allegiances shifted and according to campaign finance records, he hasn’t given to virtually a single Democrat on the federal level since 2010. In the same year, he contributed $1.5 million to the Republican Governors Associations.
In 2012, he gave $30,400 to the National Republican Senatorial Committee. In 2016, the year Donald Trump beat Democrat Hillary Clinton in the presidential race, Cohen gave $2.85 million to a GOP super PAC named America Leads, which was in support of former New Jersey’s Gov. Chris Christie’s aborted effort to win the Republican nomination.
The $2 million he gave in 2017 to the GOP’s Senate Leadership Fund made him the PAC’s top donor along with Bernard Marcus, a long-time GOP contributors and co-founder of Home Depot. Political strategists say Cohen has tremendous incentive to keep giving money to the GOP since President Trump and the Republican-controlled Congress have a pro-business agenda, including lowering taxes on corporations and deregulating industry, which could mean less scrutiny on hedge funds.
"With Republicans in power, he's been making more money than he knows what to do with," Democratic strategist Hank Sheinkopf said. “For Steve Cohen, you have the money and you have the time and you can influence Congress."