London’s fund industry is bouncing back, and U.S. billionaires Steven A. Cohen and Ken Griffin are grabbing a piece of the action.

Griffin’s Citadel and Millennium Management, a hedge fund run by Israel Englander, have bulked up in London, where asset growth is outpacing the U.S. Point72 Asset Management, the family office that oversees Cohen’s wealth, is plotting a return to Europe’s financial hub by year-end, said a person with knowledge of the matter.

London lost ground with hedge fund investors earlier this decade as taxes rose on the highest earners and Europe’s debt crisis roiled markets. Now managers say trading opportunities are multiplying and dealmaking is picking up. Europe attracted $12.5 billion in the first half of the year, while funds focused on the U.S. had net outflows, according to a report from eVestment, a firm that tracks hedge funds.

“This is the first time London has looked really exciting for hedge funds since the European debt crisis in 2011,” said Ray Nolte, chief investment officer of SkyBridge Capital. The New York-based firm plans to boost investments in European hedge funds that seek to profit from events such as corporate restructurings, mergers and share sales.

The rebound is driving up demand for office space in Mayfair and other districts where hedge funds congregate. The industry’s growth contrasts with the bloodletting at Europe’s biggest banks, which are slashing thousands of jobs and closing trading desks in the face of tougher capital requirements.

London ‘Pilgrimage’

Citadel, with its London offices just streets away from the Bank of England in the centuries-old financial district, increased staff by 25 percent to about 170 over the past year, said spokeswoman Katie Spring. The Chicago-based firm oversees $26 billion.

Cohen is returning to London after shutting the U.K. offices of SAC Capital Advisors in 2013 amid a U.S. probe into insider trading. SAC’s London office was the least profitable of the hedge fund’s global hubs, two people with knowledge of the matter said. Point72, which manages $11 billion, has begun interviewing money managers and analysts for London roles, said the person, who asked not to be identified because the information is private.

“We’ve noticed a pilgrimage back to London,” said Rob Christian, head of research at Franklin Templeton Investment’s K2 Advisors, which has $10.5 billion invested in hedge funds.

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