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January 22, 2020  

Cohen's Point72 Approaching Peak Assets

The assets of Steve Cohen’s Point72 Asset Management could soon surpass those of predecessor SAC Capital.

Point72 was running $16.1 billion this month. At its peak in 2008, just before the worst of the global financial crisis, SAC had $16.8 billion under management.

The Stamford, Conn., multi-strategy shop’s assets subsequently dipped by a few billion dollars, then bounced back to an estimated $14 billion in 2013 — when a federal insider-trading investigation led to the return of all outside capital.

The probe, centering on the activities of several former staffers, also led to a guilty plea from SAC, which agreed to pay $1.2 billion to the U.S. Justice Department and $616 million to the SEC.

The rebuilding of Point72’s portfolio marks a milestone for the operation. As SAC entered an unwinding process, the firm that would become Point72 formed in 2014 as a family office for Cohen while submitting to stringent compliance procedures. And under a separate civil settlement with the SEC in 2016, Cohen had to wait until 2018 to start managing outside capital.

Including Cohen’s own money and some $5 billion of investor contributions that arrived in 2018, Point72 started 2019 with $12.5 billion under management. About $1 billion of inflows arrived in the following 12 months, with the firm’s assets further boosted by a 16% return for the year.

Point72 has benefited along the way from strong investor demand for allocations with large multi-strategy firms. So have competitors including Citadel and Millennium Management, which more than doubled their assets while Cohen was forced to wait on the sidelines.

Citadel runs $32 billion today, while Millennium oversees $38.6 billion. The environment also aided ExodusPoint Capital’s launch with $8 billion in June 2018.

A few recent personnel moves additionally have roots in Cohen’s efforts to reverse the reputational and financial setbacks he experienced as a result of SAC’s insider-trading scandal. Point72 elevated Vincent Tortorella to general counsel this month, adding to his duties as chief compliance officer. Tortorella, a one-time federal prosecutor, had joined the firm in 2014 from Coatue Management with the task of building a trading-surveillance unit.

He takes over for Kevin O’Connor, who moved to Carrier Corp. in December. O’Connor, also a former federal prosecutor, had come on board at Point72 in 2015 as Cohen sought to impress upon regulators and market professionals that he was running a clean shop.

Point72’s head of communications, Mark Herr, also left this month to start a Princeton, N.J., firm called Mark Herr Communications. Herr had joined Point72 in 2012, just as the insider-trading investigation was heating up. He previously was at AIG, having worked in a media-relations capacity in the wake of the insurer’s near-failure and government bailout during the credit crisis.

Herr’s new firm aims to handle media-relations, crisis-communications and internal-communications services for a variety of clients, including hedge fund operators. Herr will continue to represent Cohen in his efforts to buy an 80% stake in the New York Mets baseball team. Point72 spokeswoman Tiffany Galvin-Cohen currently co-heads the firm’s communications efforts with Rebecca Mitchell.