Hedge fund legend Leon Cooperman and his firm, Omega
Advisors, suffered another steep drop in assets in December as
the fallout from the Securities and Exchange Commissions
civil charges against the firm continues.
The New York hedge fund firm reported that its assets under
management declined by 27 percent in December alone, to $3.4
billion, from $4.7 billion the previous month.
Assets have nearly halved from $6.7 billion at the start of
the year and have plunged 64 percent over the past two
In September, the SEC accused Cooperman and his firm of trading
in the securities of Atlas Pipeline Partners, a
Pennsylvania-based oil and gas company, while in possession of
insider information, as well as violating other SEC
regulations. (Omega received a Wells notice, a notification
that the SEC is planning to file enforcement charges, in
While the firms assets have taken a big hit since the
charges were filed, the governments lawsuit has not had a
big impact on Coopermans investment team. In 2016, Omega
Capital, which invests in all of the firms
strategies, returned 8 percent. Gains came primarily from its
credit strategy, which returned 16 percent, while its equities
strategy added 10 percent, according to an individual familiar
with the results.
For his part, Cooperman is determined to fight the
SECs charges and go to trial in order to secure his
legacy. Let me state unequivocally and emphatically that
the firm and I did not engage in insider trading,
Cooperman, who has been running Omega for 25 years, told his
investors during a conference call in September. The
charges against us are entirely baseless, and we intend to
defend ourselves in court.
In any case, all of Omegas ten-largest long U.S.
equity positions at the end of the third quarter were long-term
positions established in earlier years. This underscores
Coopermans assertions, in his public responses to the
governments charges, that he is a long-term investor.
Omegas best performer among its major positions in
2016 was Navient, its second-largest long. Shares of the
student loan servicing company surged about 44 percent last
year. Diversified holding company HRG Group, its fourth-largest
long, rose 14 percent for the year. It sells a wide variety of
consumer products as well as insurance. Another winner was
insurance giant AIG, which surged nearly 25 percent. Other
major positions rose by slow single-digit rates, such as
Alphabet and Tribune Media Company.
On the other hand, credit card processor First Data,
Omegas largest long, lost nearly 11 percent last year.
Aircraft leasing giant AerCap Holding, its third-largest long,
slipped 3 percent.