SAC Capital Head Selling Off Some Art

October 16, 2013 James Heinsman In the News

Cohen purchased Le Reve by Picasso for $155 million

Cohen purchased Le Reve by Picasso for $155 million

Once again the enigmatic billionaire Steve Cohen is keeping Wall Street guessing about his actions and motives that accompany them. To the surprise of some and the wonderment of others Cohen has put two major works by Andy Warhol and one by abstract master Gerhard Richter up for auction. Some speculate that he made need to raise some cash to cover his mounting legal bills as he builds a defense against the government’s investigation into alleged insider trading at SAC Capital. This reasoning is a little flawed since it is not too long since Cohen invested a hunk of money into the purchase of a major work by Picasso and a giant piece of land in the Hamptons.

The paintings will be auctioned off through Sotheby’s during their marquee contemporary evening sale to be held on November 13. The Warhols were both done in 1963 and could bring in somewhere between $27 million and $40 million.  The major Richter, entitled “A.B. Courbet [616]” is estimated at a value of anywhere from $15 million to $20 million. A second Richter that Cohen is selling, not considered a major work, and is expected to fetch a mere $2 million to $3 million.

According to the Times the government has offered to settle with SAC for a guilty plea and a $2 billion fine, therefore leading to speculation that this is the reason for the unloading of Cohen’s art. However, if Cohen is strapped for cash, how can we explain his purchase, for $155 million for a Picasso, claimed to be the largest sum ever paid for a piece of art by a US collector, last March. He also dropped another $60 million on a property in East Hampton just a few steps away from property that he already owns.

Estimates put Cohen’s net worth at about $9.4 billion, most of it invested in SAC Capital. Although it is not clear if Cohen is having cash-flow problems, it is clear that many investors in his hedge fund are removing their capital, taking away an important source of income for Cohen. SAC Capital’s management fees are among the industries’ highest. Some reports claim that within a few months Cohen could be the only investor left in his fund.

Andy Warhol, Gerhard Richter, SAC Capital, Sotheby's, Steve Cohen,

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