Cohen's Hedge Fund Beats the Competition

Steve Cohen's New York Mets ended their 2024 baseball season with a loss to a playoff rival, but the billionaire’s hedge fund, Point72 Asset Management, finished the year as a clear winner. The firm’s flagship fund delivered an impressive return of approximately 19%, outperforming competitors like Citadel, Millennium Management, and other industry peers, as well as broader hedge fund indexes. This marked a notable improvement from its 10.6% return in 2023.

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Point72’s stellar performance has led to a unique challenge often associated with success on Wall Street—managing an abundance of investor cash. By mid-2024, the firm was overseeing $35 billion in assets. To maintain efficiency, Point72 plans to return $3 billion to $5 billion in profits to its investors in early 2025, according to sources familiar with the matter.

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Recent returns have left investors pleased enough to accept changes in the firm’s fee structure. Unlike traditional fixed management fees, Point72 passes on operating costs to clients, a practice that varies year by year. Going forward, clients will cover certain expenses previously absorbed by Cohen, potentially increasing their costs by a fraction of a percentage point relative to the fund’s assets.

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At the forefront of today’s hedge-fund landscape are multimanager firms like Point72, Citadel, and Millennium. These firms spread capital across numerous specialized teams, carefully managing risk to ensure consistent returns. Their influence on Wall Street is considerable, accounting for a significant portion of hedge-fund jobs and having a notable impact on stock market trading.

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In 2024, Citadel’s main fund posted a 15.1% return, while Millennium gained 15%, and Balyasny Asset Management achieved a 13.6% return. A composite hedge-fund index from research firm PivotalPath showed an industry-wide gain of 10.8%, while the S&P 500’s total return outpaced them all at 25%. Despite this, many pension plans, foundations, and institutional investors favor the stable performance of multimanager firms over more volatile funds that alternate between extreme highs and lows.

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Cohen, whose net worth is estimated at $21 billion by Forbes, has heavily invested his hedge-fund earnings into the Mets. After purchasing the team for approximately $2.5 billion in 2020, he spared no expense in enhancing its roster, aiming for a World Series title. Transitioning from a publicity-averse figure to a more engaged public persona, Cohen regularly shares his thoughts about the Mets and interacts with fans on the social media platform X, where he boasts nearly 300,000 followers who often call him “Uncle Steve.”

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Following the Mets’ elimination by the Los Angeles Dodgers in the 2023 playoffs, Cohen made headlines by signing superstar outfielder Juan Soto to a groundbreaking 15-year, $765 million contract, the largest player deal in sports history.

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Cohen’s professional focus has also shifted. A few months ago, he decided to step back from managing his personal trading portfolio to concentrate on running and expanding Point72. One notable move was hiring Todd Hirsch, a former Blackstone executive, to lead the firm’s foray into private credit, one of Wall Street’s fastest-growing sectors.

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In addition to this strategic expansion, Point72 launched a specialized stock-picking fund in October, dedicated to artificial intelligence companies. Named Turion, after AI pioneer Alan Turing, the fund was seeded with $150 million of Cohen’s personal money. Turion focuses on long-term holdings and takes on more exposure to market volatility compared to Point72’s primary fund. In the final quarter of 2024, Turion achieved a return of approximately 14%.

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Despite their success, multimanager firms like Point72, Citadel, and Millennium face a new challenge: deploying their substantial capital effectively. Millennium and similar firms have been channeling billions into external hedge funds, while Citadel has previously opted to return billions to its clients.

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Cohen’s strategic decisions and financial expertise have positioned Point72 as a standout in the competitive hedge-fund industry. By diversifying into private credit and AI-focused investments, the firm is exploring new growth opportunities while continuing to deliver strong returns. At the same time, Cohen’s efforts with the Mets reflect his commitment to achieving success both on and off the baseball field.

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