Point72’s Cohen Bets $250 Million on Crowd-Sourced QuantopianBy
Billionaire also invests in Boston firm through venture unit
CEO says ‘watershed’ moment will boost allocations, royalties
Point72’s Steve Cohen is committing as much as $250 million of capital to be managed by Quantopian Inc., the 5-year-old online platform where members build computerized trading models and earn a share of profits.
Cohen’s bet on the Boston-based firm is the first major commitment of funds for Quantopian to manage using its members’ algorithms, the company said Wednesday in a statement. Cohen is also making an undisclosed investment in Quantopian through his family-office’s venture-capital arm, Point72 Ventures, a “watershed moment for the entire industry” that will enable Quantopian to increase allocations and pay larger royalties to authors of profitable algorithms, Chief Executive Officer John Fawcett said in the statement.
Quantopian’s free online platform gives anyone the ability to create and test investment algorithms. With barriers to entry falling in computerized investing, the firm says it has grown to more than 400,000 algorithms written by over 85,000 members from 180 countries. Quantopian, which has held programming contests trading venture-backed capital for more than a year, says it tests each algorithm and makes allocations based on factors such as return and risk, rewarding those whose strategies perform best.
A portion of Cohen’s commitment is contingent on Quantopian meeting performance metrics.
“The scarce resource in quantitative investing is talent,” said Matthew Granade, the leader of Point72 Ventures. “Quantopian has demonstrated an innovative approach to finding that talent.”