Cohen returned 1% in 2018, 5% in Q1 of 2019 vs S&P 13%.... He's looking to raise another $1 billion... People are paying 2 and 20 (or much higher) to make 1-5%? https://www.bloomberg.com/news/arti...to-open-to-new-money-seeks-to-raise-1-billion Steve Cohen wants more. His Point72 Asset Management, which attracted $5 billion in outside money last year in a comeback for the hedge fund investor, is seeking to raise an additional $1 billion by September, according to people familiar with the matter. The firm was one of 2018’s biggest hedge fund launches when Cohen returned to the industry after a two-year ban from managing other people’s money. His prior firm, SAC Capital Advisors, pleaded guilty to securities fraud and paid a $1.8 billion fine. Cohen wasn’t charged with wrongdoing. A spokeswoman for the firm declined to comment on the latest fund raise. Read more about Steve Cohen’s comeback here It’s difficult for hedge fund managers, particularly new ones, to raise money amid the industry’s lackluster performance. Last year, as investors pulled more than $38 billion from hedge funds, the number of startups dropped to the lowest in almost two decades. While 2018 did see some blockbuster launches, including Michael Gelband’s $8 billion ExodusPoint Capital Management, this year is comparatively muted, with one of the biggest startups expected to be around $1.5 billion. Cohen, backed by his long-term track record, hasn’t struggled to raise money. In November, he said that attracting the first $5 billion was relatively easy, requiring just 10 to 15 meetings, including one overseas trip. Point72 had a mediocre start last year, making less than 1 percent for investors. While that performance beat the S&P 500 Index and the average hedge fund, it wasn’t the big number that many expected, given SAC Capital’s history of averaging annual returns of about 30 percent. This year has been better. Point72 returned almost 5 percent in the first quarter of 2019. That compares with a 13 percent rise in the S&P and a 3 percent gain for the average hedge fund.
It's not only the poor performance. His past great performance generated by his ex-company SAC used an illegal edge called insider trading. How can investors of Point72 expect similar performance, given that the past edge was illegal? Furthermore, I doubt his new firm will be able to attract quality staff. Who would want to work for a boss who gets away scot-free while his employees take the blows when bad things happen? SAC signed a guilty plea, employees were indicted, some went to jail, but the man at the top, Steve Cohen, gets away scot-free. https://www.newyorker.com/magazine/...nt-after-the-hedge-fund-legend-steven-a-cohen
A lot of past performance was driven by either illegal insider trading or grey zone collusion with other shops/traders. Agree 100% with you.
Not to defend anything illegal, but it sure looked like Stevie got shaken down for that settlement. Nice hedge fund you got there, it’d be a shame if we investigated it forever and ran off all your clients...
(Disclaimer: I read the book, loved it) For what it's worth (not very much), if you haven't murdered or physically harmed anyone, there is a surprising amount of flexibility when dealing with various government agencies. Just don't make it a moral crusade unless you have completely damning evidence that would destroy the credibility of the agency or the person doing the investigating. Even if you're right, you still have to pay sometimes.
%% Most likely, look how rich people refuse to panic sell Buffet / Berk, even when he underperforms for 2 years. ......... 3 years maybe the straw that broke the back?? ??????
Most large HF's got pretty shitty performance. I guess institutions want to gain access to uncorrelated income streams to lessen portfolio risk. And these are not easy to come by for larger purchases so they take what they get. The number of available large AUM funds are limited. I heard institutions say 4-5% annually is all fine as long as it is absolute return. It's all about correlations..