By Svea Herbst-Bayliss

BOSTON (Reuters) - Steven A. Cohen has hired a hedge fund industry veteran to head a new training program designed to pass the billionaire investor's famous stock picking skills to a new generation as he rebuilds after an insider trading scandal.

Cohen's $11 billion firm Point72 Asset Management said on Thursday that Jaimi Goodfriend, a college lecturer in Illinois who previously worked for hedge funds Citadel and Balyasny, will become Point72 Academy's first director.

The academy has accepted 15 undergraduates out of 1,300 applicants into an eight-week summer internship. It picked 15 college graduates from several hundred applicants for a longer program that will teach financial modeling, stock research, securities laws, ethics and compliance. The paid summer internship begins in June while the longer Academy class program commences in August.

"We compete with the major banks, private equity firms and Silicon Valley for the same people," said Point72 President Douglas Hayes. "The Academy will help us get first crack at the next generation of investor talent before they might go elsewhere."

Cohen is not expected to teach any classes. Still, he will have contact with trainees from his seat at the center of the trading floor, a firm spokesman said.

The first trainees, from schools including Yale, Columbia, and Cohen's alma mater the University of Pennsylvania, will be mentored by senior analysts and portfolio managers and are likely to be promoted into Point72's fulltime ranks after completing the program.

"It is a combination of earning an advanced degree and participating in an apprenticeship," the spokesman said about the program, which is unusual in the hedge fund industry.

Cohen's SAC Capital Advisors managed $14 billion in early 2013. The firm pleaded guilty in that November to insider trading charges. After the government forced SAC to return all money to outside investors, Cohen changed the firm's name to Point72 and now focuses, with the help of 875 employees, on investing his multibillion-dollar personal fortune.

Cohen's style of stock picking has always been labor intensive and his firm has long had one of the biggest staffs in the business.

After an insider trading scandal prompted many portfolio managers to leave SAC, Cohen decided to rebuild with newcomers who can be trained in-house.

Previously, SAC tended to hire analysts and portfolio managers with long resumes to deliver the 25 percent average annual return that attracted big-name investors. Even as the firm has shrunk asset size, its returns remain strong with a 7.5 percent return during first quarter of 2015, which handily beat the average hedge fund's 2.4 percent gain.

(Reporting by Svea Herbst-Bayliss; Editing by David Gregorio)