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Leon Cooperman to Convert Omega Advisors to Family Office at Year End
The 75 year-old ex-Goldman Sachs partner says health concerns are not the reason behind the decision, which was driven by “how I want to spend my remaining years,” according to a letter the firm sent to clients.
Leon Cooperman is shutting down his hedge fund firm, Omega Advisors, and returning all capital to investors at year end, according to a letter sent to clients dated July 23 and obtained by Institutional Investor.
“This decision is a personal one driven not by any health concerns, but solely by how I want to spend my remaining years,” said Cooperman, who turned 75 last April.
Omega had $3.6 billion in assets as of June 30, according to its website. Cooperman said in the letter he does not want to spend the rest of his life “chasing the S&P 500 and generating returns on investor capital.”
Cooperman said more than half of the firm’s assets under management is general partner capital.
Cooperman also said Omega Credit Opportunities Fund, headed by Sam Martini and Eric Schneider, will continue to operate.
In addition Rebecca Pacholder, an Omega portfolio manager for the past six years, will launch a new fund focused on high-yield debt and distressed securities.
Cooperman is one of the longest-tenured hedge fund managers, having launched Omega in 1991.
Before that, he spent more than 25 years at Goldman Sachs & Co., serving as general partner of the firm and as chairman and chief executive officer of Goldman Sachs Asset Management.
In September 2016 the SEC accused Cooperman and his firm of trading various securities of Atlas Pipeline Partners using illegal insider information, as well as violating other SEC rules on making timely filings of securities holdings.
Cooperman, who was concerned about his legacy on Wall Street, angrily turned down an initial proposed deal from the regulator, which he felt was onerous, insisting at the time he had done nothing wrong.
In May 2017 he and SEC officially reached a settlement that called for him to pay $4.95 million and agree to a compliance monitor for five years. Most crucially, there was no industry ban or admission of wrongdoing.
In an earlier interview with II, Cooperman made it clear that the SEC case was very personal. “My wife was very nervous during that whole period — very upset,” he said at the time.
The Bronx-born billionaire is the son of Jewish immigrants and the first person in his family to graduate from college.
II recently reported that Omega Overseas Partners,Ltd. had gained 4.7 percent this year through July 9 after suffering a sharp loss in the first quarter.
Last year, Cooperman earned $500 million, qualifying for the Rich List for the seventh time.
He has taken the Giving Pledge, which means he has committed to giving away more than half his wealth when he dies.
Since its inception, Omega Overseas Partners has compounded at a 12.4 percent annual rate, after incentive allocations, compared with 9.5 percent for the S&P 500, including dividends reinvested.