About 20 portfolio managers have left Steven A. Cohen’s hedge-fund firm this year, including several who worked with Mr. Cohen for more than a decade, according to people familiar with the matter.
It is an unusual level of turnover for Mr. Cohen’s firm and marks the latest developments in the rocky relaunch of his fund. The 63-year-old billionaire investor launched Point72 Asset Management last year after an insider-trading scandal barred him from managing outside money until 2018.
Point72 had one of the largest hedge-fund launches in the year, but the firm didn’t raise as much money as it initially hoped. In addition, returns were roughly flat for the year, according to a communication to investors reviewed by The Wall Street Journal.
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The departures at Mr. Cohen’s new firm come largely from Point72’s stock-focused division. At least a dozen portfolio managers out of roughly 50 in that division’s U.S. and London offices have left this year, according to the people familiar with the matter.
Some of the managers have left the hedge-fund industry. Others have moved on to other funds, with some of those former employees receiving higher offers.
At least five left for rival Citadel LLC, a development that has upset Mr. Cohen, people familiar with the matter said. After one portfolio manager announced earlier this year he was taking a job at Citadel, Mr. Cohen refused to shake his hand, some of the people said.
“We’ve hired more portfolio managers this year than have left,” Point72’s spokeswoman said in a statement. “The Firm is growing and our portfolio manager retention rates are best in class because we invest in people’s careers and develop talent organically.” She declined to comment on Mr. Cohen’s reaction to the departing managers, but said three managers have left Citadel for Point72 this year.
Mr. Cohen’s old firm, SAC Capital Advisors LP, was one of the most profitable hedge-fund firms in the U.S. before it pleaded guilty to criminal insider trading charges in 2013. The Securities and Exchange Commission sought to have Mr. Cohen barred for life from the securities industry for failing to supervise employees involved in insider trading. A civil settlement he reached instead restricted him from serving as the supervisor of a registered fund until last year. He didn’t admit or deny wrongdoing as part of the civil settlement.
SAC was also known as one of the top paying hedge funds, former employees say. Some now say pay at Point72 isn’t as high as it used to be at the predecessor firm. In recent weeks, Mr. Cohen has expressed surprise by how much Citadel has offered and has sought ways to pay more, people familiar with the matter said.
Citadel has offered pay packages that include millions of dollars—guaranteed regardless of whether the portfolio managers make money for the firm, according to people familiar with the contracts.
Among the recent departures is David Corwin, a 13-year veteran who resigned last week and is expected to work at Citadel, according to people familiar with the matter. Justin Lubell, a technology portfolio manager who spent 11 years with Mr. Cohen and managed more than $1 billion, left for Citadel last month.
Another longstanding deputy, Perry Boyle, told colleagues earlier this year that he expects to leave Point72 at some point, people familiar with the conversations said. Mr. Boyle, 55, has worked with Mr. Cohen for 15 years and has headed the firm’s fundraising efforts. Reached by telephone last week, Mr. Boyle said he has no plans to leave the firm.
Mr. Cohen and his representatives said in earlier conversations about fundraising with bankers, colleagues and potential investors that the goal for Point72 was to amass $20 billion, the Journal reported in 2017. Point72 raised $6 billion last year and now manages $14 billion, roughly half of which belongs to Mr. Cohen, according to people familiar with the firm.
Point72 has also received some unwanted attention. Last year, a female employee sued the firm in federal court, alleging widespread gender discrimination and naming Point72’s then-president, Douglas Haynes, as a defendant. Weeks later, Mr. Haynes stepped down. He has denied the allegations and has since filed a defamation lawsuit in New York County Supreme Court against the female employee.
Mr. Haynes declined to comment. A representative for the female employee’s law firm wasn’t immediately available for comment on the defamation suit.
Point72 has also denied the allegations and previously said it would defend itself “in a more appropriate venue than the media.” The firm added that it stands by its record of hiring and developing women.
Returns at Point72 have been better this year. Point72’s flagship fund is up roughly 9% through the first six months, while Citadel’s has gained about 14%, according to people familiar with the funds.
Write to Rachael Levy at email@example.com
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