- The billionaire Steve Cohen has been posting double-digit gains this year following a period of underperformance, according to multiple people we’ve spoken with.
- The gains come as a third-party firm has been pitching potential investors on Cohen’s comeback.
- Cohen may open up to outside capital again in 2018 after his firm was banned from the industry for insider trading.
It sounds as if the billionaire Steve Cohen is having a surge in performance — and at exactly the right time.
Exact numbers are hard to come by — even some senior staff members at Cohen’s family office, called Point72 Asset Management, don’t have a complete picture — but several people with knowledge of the matter say the hedge fund manager is posting gains just as he plots his return to managing outside money again.
Point72, with $US11 billion in assets, is up by as much as the high teens this year, one person close to Point72 said — though that number requires caveats.
Here’s a breakdown of what we’ve heard from people close to Point72:
- The firm was up about 8.5% after expenses through August, according to a separate person who said they had seen the figures.
- In September, the firm’s main fund posted gains of 3% to 3.5%, largely because of its fundamental long-short portfolio, bringing gains to about 11% after expenses through September, according to the first person.
- And in October, the fund posted gains of about 8%, this person said.
On the high end, that would mean Point72 could be up as much as 19% this year — though it’s unclear whether that figure takes into account expenses. But it roughly lines up with what another person, who is close to Cohen, has said: that the fund is up this year in the mid-teens.
And numerous other people in the hedge fund launch space have said the fund is doing better this year, though few of them had specific details.
Point72’s expenses are high, meaning fees could shave off several percentage points on the numbers we’ve heard, according to people who have worked there.
Jonathan Gasthalter, a spokesman for Cohen, declined to comment.
Point72 has been cagey about releasing its performance, and not all staffers receive it. Even investors who have been pitched on a potential new fund haven’t gotten updated figures. That has led to a lot of speculation.
What’s universally said, though, is that performance has gotten better since last year, when the fund finished roughly flat.
The underperformance had concerned Cohen, according to a person close to him. After all, he was known for knockout returns in the 30% range before his hedge fund SAC Capital was shut down over insider trading.
Cohen is mostly known for long-short equity investing. He has been running a family office called Point72 Asset Management, with some $US11 billion of his personal fortune and that of some staffers, since 2014 after he agreed not to manage other people’s money and return outside investors’ capital. The agreement came after a multiyear insider-trading investigation at SAC that ended with a conviction for one of Cohen’s subordinates but not him. His failure, according to the SEC, was to supervise those traders as head of SAC Capital. SAC also pleaded guilty and paid a record fine, $US1.2 billion, to settle insider-trading claims.
Cohen, via an external marketing firm, has been laying plans to potentially manage other people’s money for the first time since shutting three years ago. The new fund would be called Stamford Harbour.
To be sure, Cohen could still decide against launching. Everyone we’ve spoken with stressed that it was not official yet, even though some investors have been pitched.
The Wall Street Journal reported in May that Cohen was seeking to raise about $US9 billion, which combined with his roughly $US11 billion family office would lead to a $US20 billion fund — the biggest hedge fund launch of all time.
But a person with direct knowledge of the plans told Business Insider last month that Cohen’s Stamford Harbour fund was likely to aim closer to $US2 billion in fresh funds.
Either way, the fund is one of the most talked about among investors, and banks’ prime brokerage units have been clamoring to get a piece of the business.
The external marketing firm, ShoreBridge Capital Partners, has been pitching Cohen’s potential new fund to some of the world’s biggest hedge fund investors and is said to be requiring minimums of $US100 million, Business Insider earlier reported.
Doug Blagdon, who has facilitated investor meetings regarding Stamford Harbour at ShoreBridge, didn’t respond to a voice message and email.