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The Morning Brief: Cohen Hopes to Launch $20 Billion Hedge Fund

Steven Cohen reportedly aims to start a new hedge fund with $20 billion after he’s allowed to raise outside money in January.

Steven Cohen is hoping to make an explosive return to the hedge fund world. According to the Wall Street Journal, the one-time head of SAC Capital is looking to start off with a whopping $20 billion when he is allowed to raise outside money and launch a hedge fund in January 2018. Now, keep in mind that $11 billion of this sum is the current amount of money being managed by Cohen’s family office, Point72 Asset Management, which currently has about 1,000 employees. Still, $20 billion would be the largest amount of money ever raised in a new launch of a hedge fund. It would also exceed the $16 billion that SAC managed at its peak. Cohen was prevented from heading up a registered fund until 2018 as part of a civil settlement with the Securities and Exchange Commission after he was charged with failing to supervise employees who engaged in insider trading. His firm pleaded guilty to insider trading and paid $1.8 billion in penalties as part of a settlement. With such a large fundraising target, any modest success will likely land Cohen once again on the Rich List in two years. We’ll be watching closely.

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UBS raised its price target on Athenahealth from $123 to $152, noting the stock has seen a “meaningful re-rating” since Paul Singer’s Elliott Management Corp. disclosed on May 18 it owned 9.2 percent of the medical software company. “This has also created a broader discussion around the opportunity for a re-positioning (either through improved operational performance or other measures), a welcome solution after a couple quarters of challenged growth,” UBS adds in a note to clients. We have reported on many occasions that Athenahealth is a major short position of David Einhorn’s Greenlight Capital, creating a battle of the sometimes activists. This is what makes a market.

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JANA Partners trimmed its stake in Whole Foods to 8.2 percent from 8.3 percent, noting that as of May 19 it no longer held any call options, according to a regulatory filing. In addition, the hedge fund firm headed by Barry Rosenstein said that on May 27 it entered into a nominee agreement with Celeste Clark, a consultant on nutrition, health policy, regulatory matters and leadership. Clark previously served as senior vice president of Global Public Policy and External Affairs and chief sustainability officer of Kellogg Company. Clark currently serves on the boards of Mead Johnson Nutrition Company and AdvancePierre Foods. Altogether, JANA and its nominees own 8.7 percent of the shares.

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Bank activist Lawrence Seidman disclosed he owns 5.05 percent of Pilgrim Bancshares, a Cohasset, Massachusetts bank holding company that operates three banking offices in Massachusetts. In a fresh 13D filing, Seidman says the shares of the company, which has a $37.6 million market capitalization, were undervalued when he bought them. He also said he has had a telephone conversation with Pilgrim’s president and chairman to talk about the company’s performance. They agreed to meet “within a reasonable amount of time to discuss ways to maximize shareholder value.”

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Scott Shleifer, who runs the hedge funds of Tiger Global Management, is at the center of a zoning controversy in Southampton Village. It seems Shleifer wants to build a 16,195-square-foot mansion in the community’s historic district. However, Ellen Scarborough, wife of veteran New York City newsman Chuck Scarborough, is publicly speaking for the opposition, including the Board of Historic Preservation and Architectural Review, asserting in a Newsday report that the new building “would be a blight in the heart of the historic district.” Scarborough, who would view the new structure from her home, added: “It offends me that someone wants to put something like that in what should remain a charming village, and not some repository for every person who needs to build their mansion.” According to the report, Shleifer spent $53 million to acquire two adjacent parcels totaling 6.52 acres.

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