End of an era: Steve Cohen retires from hedge fund Point72.

In November 2020, when Steve Cohen completed the purchase of the NY Mets for $2.4 billion, some joked that buying this struggling baseball team, considered by many to be the worst in the league, would ultimately lead to the downfall of the legendary hedge fund manager. While that didn’t exactly happen, the cynics weren’t far off: Cohen, who was an inspiration for the show Billions and a pioneer of “information arbitrage” investing, is stepping away from daily trading at the firm he founded ten years ago. Although the 68-year-old billionaire and founder of Point72 Asset Management remains co-Chief Investment Officer (CIO) alongside Harry Schwefel, he will no longer invest client capital. Cohen plans to “step back from trading his own funds and believes he can have a greater impact by focusing on firm management, strategic initiatives, and mentoring the next generation of talent,” according to a Point72 spokesperson in an email statement.

For years, Cohen has been one of the most prominent figures in the industry, successfully rebuilding his hedge fund after an insider trading scandal in 2010. Despite growing his firm into a hedge fund managing $35 billion in assets with over 185 trading teams, and branching out into other ventures, including the purchase of the New York Mets in 2020, he has maintained his own trading, which he regularly managed.

“There is tremendous value in Steve being a significant mentor to our investment professionals,” said Point72 spokesperson Tiffany Galvin-Cohen in the statement. “He’s been doing this for 40 years and has seen a lot. That’s what brings him the most satisfaction these days—helping people succeed and seeing the difference it makes—and where he feels he can add the most value.”

Along with Millennium and Citadel, Cohen’s Point72, which began as SAC Capital, was considered one of the original multi-strategy funds, but Cohen was always at the center of the trading floor and could stop any deal he didn’t approve of. However, over time, Point72 has become more decentralized, and now, as its teams manage a variety of strategies in equity long/short, macro, and quantitative investments, no single trader, including Cohen, is essential to the fund’s ability to generate profits. Nevertheless, as Bloomberg points out, his withdrawal from daily trading will be a test to see if multi-strategy funds can thrive without their legendary founders like Cohen, Englander, and Griffin.

Cohen’s original fame stemmed from a 30% annual return at his previous firm, SAC Capital Advisors, which paid a record $1.8 billion fine to settle a seven-year insider trading investigation. SAC pleaded guilty in 2013 to making hundreds of millions of dollars from illegal activities and fostering a culture that rewarded blatant insider trading. However, this didn’t prevent his current firm from becoming a massive success.

Following SAC’s guilty plea, Cohen rebranded the firm as Point72, returned client capital, and traded with his own billions. By early 2018, however, he resumed managing funds for external investors, who seemed to overlook Cohen’s troubled past as they invested $12.8 billion into Point72 by 2020. As of July 1, the firm managed a record $35.2 billion, showing that investors still support a hedge fund run by teams of traders. Point72 earned about 10% this year through August and is considering returning profits to clients in 2025, Bloomberg reports.