Shift for SAC's Cohen
Hedge fund magnate Steve Cohen is now dabbling in private equity.
In a somewhat surprising move, Cohen's $12 billion SAC Capital Partners behemoth is stepping up to the plate to help finance a $3.1 billion management-led buyout of Laureate Education (LAUR). The Connecticut-based hedge fund is part of a group of investors taking the higher education company private in a deal led by Laureate CEO Douglas Becker, Kohlberg Kravis Roberts and Citigroup's (C) private equity arm.
There's nothing surprising in finding a private equity giant such as KKR heading up another leveraged buyout. But it's not every day that Steve Cohen gets involved in an LBO.
A spokesman for SAC declined to comment on the deal, which includes the assumption of $700 million in debt. But people familiar with the hedge fund say this is the first significant LBO involving SAC.In the deal, the buyout group is proposing to pay $60.50 a share for Laureate, which represents a 23% percent premium to the stock's closing price on Jan. 4. That was the day before the company's board began negotiating a deal with its CEO and the buyout group. The deal is also being financed with debt provided by Citigroup and Goldman Sachs (GS). It's not clear if the Laureate deal, which also includes several small hedge funds, marks a shift in investment strategy for Cohen and SAC. It's possible that Cohen is sinking money into Laureate simply because he sees it as a good investment. As of the end of September, SAC had a small equity position in Laureate, owning less than 50,000 shares.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV