Ends ‘Tagging’
In the intervening years, Cohen’s family office, which currently manages about $11 billion in net assets, worked to rehabilitate his reputation.
In November 2014 the firm sent a memo to its staff saying it would stop what it called “tagging,” or paying people for successful investment ideas. The firm stopped the practice because “the Government cited tagging prominently in its case against SAC and the cases brought against its employees, believing tagging created an incentive for an employee to seek improper information in the hope of receiving a ‘tag bonus,’ ” the memo said.
Cohen has also installed a command center in the middle of the trading floor of his new firm. There, a 50-member compliance team is strategically positioned to listen in on traders’ conversations in real time, comb through emails for suspicious language and even veto job candidates.
When the firm opens to outsiders, Cohen’s portfolio, including the best ideas, will account for less than 5 percent of assets, the people said. Even though the percentage is small, it translates into billions of dollars of capital because Point72 oversees about $90 billion when leverage is included, according to a recent Securities and Exchange Commission filing.
As was the case at SAC, Point72’s assets are farmed out to dozens of teams. The new firm has fewer senior portfolio managers running books of $1 billion or more, because many of the most senior people have left the firm in recent years.
Point72 initially anticipated raising as much as $10 billion in outside cash for the new fund, people said. Instead, the firm will start -- in one of the most highly anticipated fund launches of the year -- with $3 billion to $4 billion of external capital.
This article was provided by Bloomberg News.