market folly

In a 13G filed recently with the SEC, hedge fund SAC Capital has disclosed an 8.6% ownership stake in Vanda Pharmaceuticals (VNDA). They now own 2,279,423 shares. You may be familiar with this stock as it has recently surged huge after their schizophrenia drug got FDA approval.

In our May 2009 post on hedge fund performance numbers, we saw that SAC Capital is up 13.93% for the year thus far. Recently, they were ranked #17 in Barron's hedge fund top 100 rankings. Taken from their website, “SAC is a multi-strategy, private asset management firm founded by Steven A. Cohen in 1992 with 9 employees and $25 million in assets under management. As of July 2008, the firm has grown to over 800 employees with approximately $14 billion in assets under management. SAC's initial investment style was "trading" oriented. However, we have evolved into a multi-strategy, multi-disciplinary, investment management firm emphasizing rigorous research and risk management practices. SAC's investment strategies include, but are not limited to: Fundamental and Technical Long/Short Equity Portfolios, Global Quantitative Strategies, Fixed Income and Credit, Global Macro Strategies, Convertible Bonds, and Emerging Markets.”

Since inception, their funds have returned on average 40% annually, which explains how they can charge a 50% performance fee to investors, compared to the normal 20% that most hedge funds charge. Stevie Cohen was recently on Forbes' billionaire list, as well as the top hedge fund manager losers of 2008, due to the rough year they had. And, for those curious as to how hedge fund managers live, you can see a picture of Cohen's house here.

Stay tuned in the coming week as we'll check in on the rest of SAC's portfolio in our hedge fund portfolio tracking series.

Taken from Google Finance,

Vanda Pharmaceuticals is "a biopharmaceutical company focused on the development and commercialization of clinical-stage drug candidates for central nervous system disorders, with worldwide commercial rights to two product candidates in clinical development."