19 September 2006

SAC's Cohen sees risk of mass hedge fund exit: WSJ | Business News | Reuters.com

SAC's Cohen sees risk of mass hedge fund exit: WSJ | Business News | Reuters.com: "NEW YORK (Reuters) - Steven Cohen, the billionaire founder of SAC Capital Advisors, said in an interview with the Wall Street Journal that there may eventually be a sharp fall in the stock market, exacerbated by hedge funds crowding into similar shares.
In the interview, published on Sunday, the 50-year-old head of one of the world's most closely watched investment firms also said he was now making bigger bets and holding stocks for a longer time.
'It's hard to find ideas that aren't picked over, and harder to get real returns and differentiate yourself,' Cohen said in the interview. 'We're entering a new environment. The days of big returns are gone.'
The highly secretive investor, whose net worth Forbes magazine estimates to be around $2.5 billion, was also quoted as saying there were risks in burgeoning hedge funds investing in the same stocks.
'There will be a real decline that may devastate hedge funds that have crowded into the same stocks,' he said, adding that he was not worried about that happening this year.
'Hedge funds are bigger than they used to be. Their positions are bigger,' he said. 'I worry that if everyone were to sell, could we get out?'
© Reuters 2006. All Rights Reserved."

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