Has Mr. Cohen tired of East Hampton? (Patrick McMullan)
Less than a year after buying 52 Further Lane, one of East Hampton’s most opulent estates, embattled hedge fund billionaire Steven A. Cohen is quietly trying to offload the oceanfront mansion. Last Tuesday, hours before To Catch a Trader—a film about the Justice department’s pursuit of Mr. Cohen and his firm SAC Capital for insider trading—aired on PBS, its main character was in the Madison Avenue office of a top Upper East Side lawyer trying to figure out how to privately sell his newly-bought mega mansion. The Greenwich, Conn. resident shocked the Hamptons last spring when he paid $62.5 million for the home of late banker Robert McKeon.
The property had been on the market for barely a week when Mr. Cohen outbid another buyer, rumored to be fellow billionaire art collector David Geffen, with an all cash offer that was several million dollars higher than the entertainment industry impresario’s, according to a family member familiar with the transaction. At the time, local brokers said that Mr. Cohen and his wife planned to gut the home and rebuild. But those plans were apparently derailed by a slew a negative press about his spending spree on super-prime real estate that coincided with the Justice Department charging SAC Capital with four counts of securities fraud and one count of wire fraud related to insider trading. Wall Street’s securities regulator also filed a civil suit against Mr. Cohen and is currently attempting to take away his trading license.
Mr. Cohen's $60 M. Further Lane estate. (Zillow.)
Since buying the East Hampton estate in March, Mr. Cohen settled with the Justice Department for a hefty fine of $1.8 billion after the firm plead guilty on all counts; Mr. Cohen is currently in the process of winding down his once 800-person trading powerhouse. Though Mr. Cohen has never been charged personally by the DOJ for insider trading, seven of his trading staff have been found guilty, with one sentenced to two and a half years in prison and others continuing to face legal action, including Mathew Martoma, whose trial is taking place right now. Moreover, the firm’s fine is coming out of Mr. Cohen’s own pockets. But for a man worth somewhere between $8 billion and $10 billion, who last spring was busy buying high-end real estate not only in East Hampton, but also in Manhattan, what difference does $60 million make?
If it seems as though he's parting with the house in order to raise cash to pay the fines, someone close to the sale cites a very different reason. A lawyer familiar with the transaction told The Observer that Mr. Cohen wants to leave East Hampton because “it’s too Jewish.” Mr. Cohen’s second wife, the former Alexandra Garcia, a Catholic of Puerto Rican descent, had their four girls schooled at Sacred Heart in Greenwich, transferring them to Rye Country Day when the eldest neared high school. Mr. Cohen and his first wife Patricia, who have two adult children, are both Jewish.
Steven and Alex Cohen.
The 10,000-square-foot Further Lane mansion sits on 6.5 acres with a tennis court and pool. Last year, the Sotheby’s listing for the property, which was held by Ed Petrie, boasted of the home’s “high ceilings, antique oak and limestone floors and barn-style double-height family room,” going on to tout its “large oceanview master suite plus six additional bedrooms.” Presumably, the mansion still has the same attributes, as Mr. Cohen has had little time to complete his gut renovation. Mr. Cohen’s neighbor on Further Lane is famed hedgie Jim Chanos of Kynkois, who is a known short seller. Word is that Mr. Petrie won’t be earning a second commission on the mansion, however, as Mr. Cohen has supposedly tapped a different, unidentified, broker to sell the property.
A person familiar with the East Hamptons listing told The Observer that a buyer from Australia has already expressed interest in the property, but doesn’t know if they would be willing to match the price that Mr. Cohen paid for it. As of last spring, Mr. Cohen still owned a more modest spread at 96 Further Lane, which he paid $18 million for in 2007. The Chanos home had blocked the ocean view from the 9,000 square-foot property, which was, apparently, never intended to be anything other than temporary. As a source told The Observer at the time, the home was to be “Mr. Cohen’s interim summer spot until he finds something a tad more spectacular on the ocean.” Apparently, Mr. Cohen does not deign to rent.
When asked where the Cohens could move that might be less “Jewish,” this person suggested South Hampton, though Mr. Cohen should be well aware of Long Island’s social distinctions, having grown up there. His later addresses would include Greenwich and, of course, Manhattan, where he owns a penthouse at One Beacon Court that is currently on the market for $98 million, down from a stratospheric $115 million.
There was rampant media speculation last year that Mr. Cohen was gobbling up New York real estate and putting his homes in a blind trust to slow a possible government asset freeze. In April, he paid $39 million for an apartment building at 145 Perry Street, followed a short time later with the $23.4 million purchase of a maisonette at West Village uber-luxe condo conversion The Abingdon. His real estate purchases are all made through limited liability corporations, albeit ones that are often registered to Mr. Cohen’s other addresses.
At SAC, which had grown from managing $25 million in assets to some $15 billion by the time of the SEC settlement, Mr. Cohen was famous for raking in record fees, charging ‘3 and 50’ in an industry that typically charges 2 percent for management fees and 20 percent for fund performance. Since at least a third of the firm’s assets under management are Cohen’s own, the wind down of his trading behemoth is expected to turn into a family office fund where he will simply trade his own billions.
At the beginning of the DOJ’s charges against SAC Capital last year, the Wall Street Journal reported that the government wanted to take as much as $10 billion from the firm. For now Mr. Cohen has steered cleared of having the government wipe out his net worth, but Nick Verbitsky, the director of To Catch a Trader, told us that the FBI has confirmed they are looking at three other stock trades that Mr. Cohen could personally be charged on. Mr. Cohen has maintained his innocence throughout the DOJ’s aggressive insider trading probe.
Mr. Cohen’s spokesman Jonathan Gashalter refused either to confirm or deny the Hamptons listing and Mr. Cohen's reason for selling.