Forget about the fact that he’s literally already started a new hedge fund. Or that he’s already got more than half the money he plans to raise for it in his pocket, and a legion of fans ready to pony up the rest. Pretend there isn’t a third-party marketer already drumming up support. Forget about the fact that he’s already figured out the fee structure. Ignore all of the new global offices, planned new global offices, growing global offices and all of the dozens and dozens of new hires and new-hires-to-come staffing them and the rest of the Point72 empire. Also the extra 35,000 square feet on the far West Side in a building that won’t even be opening until next year. Pay no mind to all of the new funds he’s already started and all of the party-planning that’s been done. Believe, if you will, that he doesn’t need help paying the tax bill about to come due, or that he feels no need to prove himself after having his name and reputation dragged through the mud.
Convince yourself of all of the above, and then maybe, just maybe, you can believe this.
Theories abound about why Cohen would want to get back in the game of managing other peoples’ money, ranging from ego to boredom. And in the end, he may not go through with it.
And why not, when there are crowds of investors practically throwing money at his feet? Why, Steve Cohen’s legendary capacity for self-doubt, of course.
The firm eventually ballooned to $16 billion, and sustaining those monster returns became ever more difficult along the way. Over the 10 years that ended in 2012, the fund returned roughly 12 percent annually, or 5 percentage points annually better than the S&P 500….
It’s a recurring theme in finance: Size kills. And yet it’s a lesson that both managers and investors routinely fail to heed.
It's one that Cohen can't ignore as he decides whether he wants to try to reconjure the magic.
Steve Cohen’s Dubious Return [Bloomberg Gadfly]