- Firm recruited 31 people in region, 21 on investment side
- New hires include managers focused on South Korea, Australia
Steven Cohen’s Point72 Asset Management has been on its biggest ever hiring spree in Asia, seeking higher returns amid turmoil in the global hedge fund industry.
The Stamford, Connecticut-based family office, which manages $11 billion, recruited 31 people for its Hong Kong, Singapore and Tokyo offices in the first eight months of 2016, including 21 on the investment side, said Molly Binenfeld, a Hong Kong-based spokeswoman. The new hires brought its employees in the region to about 120, she said.
Point72 is hiring in the region as the $2.9 trillion global industry is grappling with investor discontent over lackluster performance and high fees. It joins peers such as Caxton Associates, Balyasny Asset Management and Folger Hill Asset Management in adding employees or offices in Asia to seek new avenues of growth and better returns.
"The region is very important to Point72,” said Marc Desmidt, Hong Kong-based chief executive officer of its international business, who joined from BlackRock Inc. in January. "We want to take advantage of some uncertainties and tougher times in the industry to get more of that really good talent.”
Investors pulled $25.2 billion out of the global industry in July, the highest monthly redemption since February 2009, according to an eVestment report. Some of the biggest global names, including Bridgewater Associates and Tudor Investment Corp., are trimming staff. Tudor, the manager of $11 billion of assets, reduced fees for a share class that contains most of its biggest hedge fund’s money and is cutting 15 percent of its workforce globally after being hit by investor withdrawals and losses.
Asian hedge funds have benefited from less crowded and less efficient markets in recent years, outperforming global peers for each of the last four calendar years since 2012. The Eurekahedge Asian Hedge Fund Index returned an annualized 9.5 percent in the four years ended 2015, compared with the 5.7 percent global average.
Still, Asian managers haven’t been immune to challenges. This year, they’ve trailed rivals in other parts of the world amid heightened market volatility in China and Japan, advancing 0.5 percent against 2.8 percent for global peers.
Former SAC manager Andrew Bazarian decided to shut an Asia hedge fund he started after losses this year dimmed fundraising prospects. Pine River Capital Management shuttered its Asia multistrategy hedge fund after it failed to attract enough assets. And Dinakar Singh’s TPG-Axon Capital Management closed its Hong Kong office and is withdrawing from Tokyo as assets plummeted, Reuters reported earlier this month.
Asia’s growth can potentially create opportunities and deepen capital markets, said Desmidt, explaining the firm’s decision to add more people in the region.
“Asia is an extremely good diversifier for us,” he said. “A large part of the firm’s portfolio is invested in the U.S.”
Point72 was created after SAC pleaded guilty in 2013 to securities fraud, agreed to pay a record $1.8 billion fine and converted into a family office. SAC opened an office in Hong Kong, its oldest in the region, in 2006. Binenfeld declined to say how much the firm invests in the region or give performance numbers.
Its hiring spree has come after Cohen struck a deal with the U.S. Securities and Exchange Commission in January that would allow him to return to managing client money as early as January 2018. The billionaire investor, whose former hedge fund had racked up average annual returns of 30 percent before the 2013 plea, said at a conference in May that he was "blown away by the lack of talent" in the industry.
Point72 has hired managers in deep and liquid regional markets such as South Korea and Australia, where the firm didn’t previously have specialists, said Desmidt, without mentioning any new hires by name.
Won Joon Son joined in March from Horizon Asset International (HK) as a South Korea-focused manager located in Point72’s Hong Kong office, according to license information posted on the website of the city’s Securities and Futures Commission. Jonathan Lin, a former analyst at Och-Ziff, started as a Hong Kong-based fund manager focused on Australia in the third quarter, according to the regulatory website and his LinkedIn profile.
In Japan, regulatory reforms such as those that will ensure fair disclosure of information to all market participants at roughly the same time could translate into higher returns for fundamental stock-pickers, Desmidt said.
"Japan remains today the deepest and most liquid market in the region, with the added attraction of some of the regulatory influences,” he said. "We absolutely have a view that Japan, over the next three, five years, is going to throw up some very interesting alpha opportunities."
Point72, which has eight Japan-focused investment teams in Asia, this year created Blue Swell Asset Management in Singapore, led by Tomofumi Oda, to bet on rising and falling Japanese stocks. It is the first such unit it set up to give an Asia-based manager more investment autonomy.
Having served as a training ground for Asia-based hedge-fund managers over the years, Point72 is not immune to staff defections. Former Asia chief Angus Wai quit last year and is now heading the Asia business of Folger Hill, the $750 million hedge-fund firm led by ex-SAC Chief Operating Officer Sol Kumin. William Leung, a long-time fund manager, left this year to set up his own firm Kadensa Capital, according to SFC records.
Point72 saw 12.5 percent of its global employees leave in the first eight months of this year, of which 5 percent was voluntary, Binenfeld said. That ’s half of the industry average of about 25 percent, she added. On average, its fund managers stay for 7.5 years, versus 3.9 years for the industry, according to a Barclays Plc report last year.