"End Of An Era": Steve Cohen Steps Back From Trading At Point72 Hedge Fund
Back in November 2020, when Steve Cohen completed his $2.4 billion purchase of the NY Mets, some joked that the purchase of the dismal baseball team, which according to many is the worst in the league, would eventually bring down the iconic hedge fund manager himself. In the end, while it may not have quite played out that way, the cynics were not that far off: As Bloomberg first reported, Cohen, who was the inspiration for the show Billions and an entire generation of "information arbitrage" investors, has stepped away from everyday trading duties at the firm he founded a decade ago.
While the 68-year-old billionaire and founder of Point72 Asset Management’s remains the funds co-CIO along with Harry Schwefel, he will no longer be investing clients’ capital. Cohen will be “taking a break from trading his own book and he feels he can have a greater impact by focusing on running the firm, driving strategic initiatives, and mentoring and coaching to the next generation of talent,” a spokesperson for Point72 said in an emailed statement.
Through thick and thin, Cohen had been one of the most iconic faces in the industry, successfully rebuilt his hedge fund into one of the world’s biggest after a costly insider-trading scandal, which we sniffed out several months in advance back in 2010. Yet even as he grew his firm into a $35 billion behemoth with more than 185 trading teams, and branched out into other interests, including his 2020 purchase of the New York Mets, he retained his own book that he traded regularly.
“There’s huge value in having Steve as an impactful mentor for our investment professionals,” Point72 spokesperson Tiffany Galvin-Cohen said in the statement. “He’s been doing this for 40 years, and he’s seen a lot. That’s what gives him the most satisfaction these days — helping people succeed and seeing it make a difference — and where he feels he can add the most value.”
Along with Millennium and Citadel, Cohen's Point72, which started off as SAC Capital, was viewed as one of the original multi-strategy funds, and yet Cohen was always at the center of the trading floor, and could kill any trade he disapproved of. However, over time, the decentralization of Point72 accelerated, and now that its teams run a diverse range of strategies across equity long/short, macro and quant investment, no single trader, including Cohen, is material to the fund's ability to generate profits. Yet, as Bloomberg notes, his move away from day to day trading will be a litmus test to determine whether multistrategy firms can thrive beyond their legendary founders such as Cohen, Englander and Griffin.
Cohen’s original claim to fame was a 30% annualized return atop his previous firm, then called SAC Capital Advisors, that paid a record $1.8 billion fine to settle a seven-year federal insider-trading probe. SAC pleaded guilty in 2013 to reaping hundreds of millions of dollars in illegal profits and allowing a culture of criminality that rewarded brazen insider trading. That however did not prevent his current firm from being a blowout success.
After SAC's guilty plea, Cohen changed the firm's name to Point72, returned client capital and traded using his own billions. However, by early 2018, he was back to managing money for outside investors who forgot about Cohen's checkered past as they invested $12.8 billion in Point72 since 2020 and managed a record $35.2 billion as of July 1, showing that investors are still keen to back a hedge fund that’s driven by teams of traders. Point72 gained about 10% this year through August and is considering returning profits to clients in 2025, Bloomberg has reported previously.