Point72 Asset Management raised roughly $3.8 billion over the past year, bringing assets to a record high, six years after founder Steve Cohen returned to the hedge fund industry.
The firm managed about $32.3 billion at the start of this year, with Cohen accounting for a third of the total. That’s more than its predecessor, SAC Capital Management, ever did in its two-decade history.
Now Point72 has decided to largely turn away new investors, in part to ensure current clients get the best possible returns, according to a person familiar with the matter. Too much capital in a strategy can sometimes hurt performance.
Cohen, the billionaire owner of the New York Mets, succeeded in attracting the fresh cash despite a difficult fundraising climate for hedge funds, as higher interest rates and a slowdown in private equity dealmaking made it more difficult for clients to deploy their money elsewhere.
Point72’s external capital has swelled from $5.8 billion since the end of 2018, the year it launched.
Cohen, 67, was banned from managing other people’s money for two years after SAC pleaded guilty to securities fraud as part of a US crackdown on insider trading. He wasn’t charged with wrongdoing.
Point72 has gathered almost $12.8 billion since 2020 — some of it from banks that cater to wealthy individuals — while several other multimanager hedge funds have been closed to new capital for years. The figures don’t include a small amount of cash the firm isn’t required to break out in regulatory filings.
It won’t be the first time that Point72 has suspended or limited inflows, having announced a similar move in a July 2020 letter to investors after the firm’s main fund posted a lackluster return of about 4% through the first half of that year. It has closed and reopened several times since then, the person said, although those moves weren’t necessarily conveyed in letters to clients. The fund gained almost 11% in 2023.
A spokesperson for Stamford, Connecticut-based Point72 declined to comment.
Managers sometimes stop taking cash and even return capital to existing investors if they don’t see opportunities to put the money to work. The fundraising moratoriums can be flexible, particularly if a single investor such as a sovereign wealth fund comes along with a lot of cash. Moreover, funds can quickly reopen once economic conditions change or markets shift.
Point72 joins several of the largest multimanager funds in constricting the cash spigot. Ken Griffin’s Citadel has been largely closed to additional capital since 2015, while Izzy Englander’s Millennium Management returned $15 billion to investors at the end of 2022, completing its plan to lock up client capital for longer. Balyasny Asset Management, with about $21 billion of assets, also stopped taking fresh cash.
Multimanager hedge funds, also known as pod shops, parcel out capital to legions of trading teams that work independently of one another, pursuing profits across a range of markets and strategies. Investors in recent years have flocked to such firms because of their ability to produce steady returns in both up and down markets, while minimizing risk.
This article was provided by Bloomberg News.