Updated Sunday, November 23, 2014 as of 9:36 PM ET

SAC Hedge Fund Turns Family Office

(Bloomberg) -- Steven Cohen, who agreed to close down his SAC Capital Advisors as part of a settlement with the U.S. government, will rename the firm and add a layer of management to oversee traders as the hedge fund becomes a family office, said a person familiar with the firm.

The firm, which will manage about $9 billion for Cohen in addition to employee money, plans to have three trading units after the restructuring, said the person, who asked not to be identified because the firm is private. One will be run by Phillipp Villhauer, SAC’s current head of trading, another by Michael Ferrucci, who oversaw the firm’s London office that closed last year, and the third by Ross Garon, who currently heads the firm’s quantitative trading group. The changes are expected to take place by mid-March.

“We have taken to heart the government’s criticisms of our business model and as we convert to a family office, we are making substantive changes,” SAC said in a statement. “Steve Cohen and the management team are determined to do what they can to prevent a repeat of the problems we experienced and so we are simplifying our business, increasing management oversight and continuing to strengthen our compliance program.”

In November, SAC Capital agreed to pay a record $1.8 billion and plead guilty to securities fraud to settle allegations of insider trading at the Stamford, Connecticut- based firm. Six former employees have pleaded guilty to insider trading, and another, Michael Steinberg, was found guilty of securities fraud in December. An eighth manager, Mathew Martoma, is currently on trial. As part of the settlement, Cohen said he would close SAC and return outside capital, ending his 22-year career as a hedge-fund manager.

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