Steve Cohen knows as well as anyone that if you’re going to shell out close to $1 billion in MLB free agent contracts, it helps to have almost twice that much money coming in.
Institutional Investor estimates that the founder of Point72 Asset Management and the owner of the New York Mets last year made more than $1.7 billion in personal capital gains in his hedge fund, which posted a roughly 10 percent net gain in 2022, according to a knowledgeable source. That figure doesn’t include his share of the fees generated by the hedge fund, so he no doubt made even more than that.
Cohen and Point72 declined comment.
Cohen’s enormous paper gain last year is likely to further irk his fellow baseball owners, who have already expressed their displeasure at his willingness to set new standards for contracts and absorb a hefty baseball luxury-tax penalty. In just the past few months, Cohen has committed to spending roughly $800 million for nine free agents. As huge as that sum is, however, it represents less than half of his 2022 earnings.
According to its website, Point72 is a multistrategy hedge fund firm with assets of $26.7 billion as of October 1. Its discretionary long-short strategy is its largest by both assets and head count. As the site explains, Point72 and EverPoint, one of the firm’s long/short equity divisions, are “sector aligned multi manager businesses.”
Point72’s Cubist Systematic Strategies is comprised of dozens of investment teams that engage in computerized trading in many liquid markets. The firm’s global macro business, on the other hand, makes discretionary investments in developed and emerging markets, including foreign exchange, fixed income, liquid credit, commodities, and derivatives.
Point72 also has a private investing business that invests in venture capital.
It’s not exactly clear what drove Point72’s roughly 10 percent gain last year. However, the most lucrative plays last year for multistrategy investment managers were betting against equities; betting that interest rates would rise; and being heavily long the U.S. dollar through September and October, before betting that the trade would reverse direction.
While Cohen’s performance last year was remarkable compared to the huge losses suffered by most investors who invest solely in the stock market, it was rather unremarkable among multistrat managers, with Point72 finishing somewhere in the middle of the pack.