Steve Cohen Pulled Down at Least $1.3 Billion in 2019

Discussion in 'Wall St. News' started by dealmaker, Feb 12, 2020.

  1. dealmaker


    Steve Cohen Pulled Down at Least $1.3 Billion in 2019

    The controversial hedge fund manager returns to familiar footing near the top of the Rich List.

    February 11, 2020

    Steve Cohen (II Illustration; Scott Eells/Bloomberg)
    Steven Cohen may not getintothe Major League Baseball owners’ suite, but he is part of an even more exclusive club: The hedge fund Rich List

    Thebillionaire founderof Point72 Asset Management earned at least $1.3 billion last year,Institutional Investorcalculated.

    Cohen is once again poised to rank near the top of the Rich List,II’s annual ranking of the 25 hedge fund managers who made the most money in the prior year. The full ranking will be published in coming months.

    [IIDeep Dive:The 2018 Rich List]

    The majority of Cohen’s windfall came from returns on his $7 billion personally invested with Point72, while his cut of fees made up the balance.

    Last year, his hedge fund returned 14.9 percent net of fees. Point72 ran $16.1 billion as of January 1 and charges clients a 2.85 percent management fee, regulatory filings show. On returns above its benchmark, the firm takes between 10 and 30 percent of the winnings.

    It’s unclear what drove Point72’s returns last year. The firm runs a highly diversified equity portfolio, with no individual holding accounting for more than 1 or 2 percent of the total portfolio, according to filings.

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    Point72 reportedly invested in hotshot hedge fund Melvin Capital Management, which surged 47 percent in one of last year’s best performances, per earlier Bloomberg coverage.

    Founder Gabriel Plotkin was a trader and consumer stock specialist at Sigma Capital Management — a division of Cohen’s old shop SAC Capital Advisors — where he spent eight years.

    SAC, of course, agreed to plead guilty to insider trading violations in November 2013 and pay about $1.8 billion in criminal and civil penalties, including a settlement with the U.S. Securities and Exchange Commission. Authorities banned SAC from managing outside clients’ money for five years.

    Cohen was never personally charged with crimes but paid for the penalties. He then set up Point72, where he invested his own wealth until his ban lifted in January 2018. In its first year managing outside money, Point72 finished slightly in the black in an otherwise down year for most equity markets and for many other hedge funds.

    That was good enough to earn Cohen $70 million, and return him to the Rich List after five years away. Cohen previously ranked in12 out of 13 years before SAC shut down, including in 2013 when he made $2.4 billion and came second behind Appaloosa Management’s David Tepper.

    Point72 emphasizes discretionary long-short, macro, and systematic strategies, and has a venture capital arm to invest in early stage deals. More than 1,500 people work at the organization, including 600-plus investment professionals.

    “We are professionals who conduct ourselves ethically and with integrity at all times,” Point72’s website states. “We have established a governance process that expects ethical behavior at a higher standard than the law requires, applies diligent risk processes, and supports the conditions necessary to produce high risk-adjusted returns.”

    U.K. regulators in 2018 blocked Cohen from opening Point72 Asset Management to investors in Britain, denying the firm’s resubmitted application, theFinancial Times reported at the time.

    https://www.institutionalinvestor.c...Cohen Pulled Down at Least 13 Billion in 2019
    ajacobson and murray t turtle like this.
  2. Turveyd


    Should of done a bit of window cleaning on the side, could of been $1,300,006,000 Fool!!
  3. RedDuke


    Amazing how he gamed the system and showed every federal authority middle finger. All one can do is just stare in awe.
  4. It's shocking that top hedge fund managers like Steve Cohen can make USD1b a year despite under-performing cheaper indices like Nasdaq100 and S&P500 (gain of more than 30% in 2019). Steve Cohen earned USD1b in a year despite destroying value for clients who would have made more money investing in cheap index ETFs.

    Index funds/ETFs are accessible to the poor as well. These days, rich people will look stupid if they reveal that they are hedge fund investors. Seems like rich people are the big suckers in the hedge fund world.

    Last edited: Feb 12, 2020

    Probably because there weren’t many Buyouts to front run
    dealmaker likes this.
  6. This is a naive thing to say without knowing the variance of his returns. To say he destroyed value because he under performed an arbitrary 1/1/2019 starting date on the index is just stupid.