American billionaire Leon Cooperman said in a letter to investors seen by Reuters that he plans to close his Omega Advisors hedge fund firm and give investors their money back, but he would continue managing his own personal wealth, Vos Iz Neias News reports.
Cooperman said that he would make sure by the end of the year, all outside capital in the New York-based fund. He added that he no longer wanted to try getting returns on investors’ money.
Omega Advisors currently manages $3.7 billion in assets, according to a spokesman for the firm.
“This decision is a very personal one driven not by any health concerns, but solely by how I want to spend my remaining years,” Cooperman said in the letter. “I don’t want to spend the rest of my life chasing the S&P 500.”
Cooperman said Sam Martini and Eric Schneider would manage under a new name one of the hedge funds run by the firm, the Omega Credit Opportunities Fund.
Omega Advisors portfolio manager Rebecca Pacholder will launch a new hedge fund focused on high yield debt and distressed securities, according to VIN News.
Cooperman would be interested in becoming a substantial investor in both funds, VIN News reports.
In May 2017, Cooperman and Omega Advisors agreed to pay a $4.95 million fine to settle a U.S. Securities and Exchange Commission insider trading lawsuit against them, according to VIN News.
Omega Advisors, Inc. was founded in 1991 by Cooperman and is registered as an investment advisor with the U.S. Securities and Exchange Commission. After 25 years of service, Cooperman retired in 1991 from his positions as general partner of Goldman, Sachs & Co. and as Chairman and Chief Executive Officer of Goldman Sachs Asset Management in order to organize Omega. In 1999, Steve Einhorn joined Lee at Omega as Vice Chairman. Steve, who spent most of his career at Goldman Sachs, most recently as partner-in-charge of Global Investment Research and co-chairman of the firm’s Investment Policy Committee, was a member of Institutional Investor’s “All-America Research Team” for 16 consecutive years.
Omega has approximately $3.6 billion under management.
The son of a plumber, Cooperman made his way all the way from the South Bronx to become one of the deans of the hedge fund industry, founding Omega Advisors in 1991 after a 25-year career at Goldman Sachs Group Inc, Bloomberg reports.
Cooperman faced a very trying and difficult time when he had to settle the insider trading lawsuit. The Securities and Exchange Commission accused both him and his firm of insider trading in Atlas Pipeline Partners securities in 2010. Even though the company reached a settlement in May of last year, the investigation spurred some clients to pull their money, leading to the firm’s assets declining to $9.4 billion in 2015.
By: Roger Dietz