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US SEC charges thrust billionaire Cooperman into spotlight
[NEW YORK] The latest insider trading charges by US securities regulators placed an unwelcome spotlight on billionaire Leon Cooperman, the son of a Bronx plumber who rose to become one of the most gifted stock pickers of his generation.
Earlier on Wednesday, the Securities and Exchange Commission charged Mr Cooperman and his hedge fund firm, Omega Advisors, with illegal trading in Atlas Pipeline Partners six years ago after they found out about the planned sale of a unit.
Mr Cooperman, 73, denied the allegations. If proven true, they would be a stain on an otherwise well-regarded career spanning five decades. The child of Polish immigrants, Mr Cooperman worked his way into Columbia Business School, where he learned the art of value investing, or scouting out mispriced stocks through deep research on companies.
He honed that skill over 25 years at Goldman Sachs Group Inc, where he focused on stock research and eventually led its asset management unit. In 1991, Mr Cooperman left the bank to launch Omega.
The New York-based investment firm has often produced exceptional returns since launching in 1991. It grew to nearly US$11 billion in mid-2014, but has faltered since then, with assets shrinking to US$5.4 billion as of Aug 31.
Still, Omega Advisors has averaged annual gains of 11.2 per cent from its inception through July, according to a report by HSBC's Alternative Investment Group. That compares with a 9.3 per cent gain for the S&P 500 Index over the same period, including dividends.
Mr Cooperman's investment returns can be volatile. The firm has often posted double-digit gains after big losses. In 2008, for example, Omega's main fund fell 35 per cent, only to rebound with a 53 per cent gain in 2009.
Mr Cooperman is now worth an estimated US$3.1 billion, according to Forbes, thanks to prescient calls such as his prediction that stocks would rebound in early 2009.
"He's a renowned value investor," said Michael Rosen, chief investment officer of Angeles Investment Advisors in Santa Monica, California. "Few have put together a track record as long and as successful as he has."
Mr Rosen said he has never invested in Omega but has tracked Mr Cooperman's career since his time at Goldman Sachs. Mr Cooperman declined to comment beyond his letter to investors on Wednesday in which he denied the SEC's allegations.
Mr Cooperman's friends and acquaintances say he is defined by three traits: frugality, addiction to work, and outspoken opinions.
He has been known, for example, to hang office art by himself to avoid paying for the service and dodge the cost of a hotel by sleeping at a friend's home. He regularly works 14-hour days, usually including numerous meetings and calls with corporate executives and grilling his investment staff.
Mr Cooperman routinely appears on cable television channel CNBC and at investment conferences to tout his views on the stock market. He also likes to share political opinions, famously writing an open letter to President Barack Obama in 2011 to criticise the "divisive, polarising" rhetoric against businesspersons like himself.
Mr Cooperman and his wife, Toby, have been married for more than 50 years. They met in a French class at Hunter College. The couple, who split time between Florida and New Jersey, have two sons.
One runs a hedge fund and the other is a fish conservationist. In 2010, he and Toby signed the Giving Pledge, a commitment to give a majority of their wealth to charity.