Rarely has the hedge fund world anticipated a launch so anxiously as that of Stamford Harbor Capital, whose big debutante's ball will mark the triumphant return of Steven A. Cohen to investing other people's money when it goes live sometime in early 2018. And though we already know some crucial details about the fund – its blue-chip fee structure, its uncompromising lockup period, its quantiness – we have little idea about what it'll actually invest in.
It's a delicate time to be launching a major multibillion-dollar hedge fund. Valuations are high, opportunities are scarce, and sources tell us Guy Fieri is no longer hiring himself out on a rent-a-friend basis. Moreover, whatever edge Cohen finds this time around, he'll be under pressure to ensure it's not of the black (read: material nonpublic) variety.
Just over a month ago, executives of firms including Quantbot Technologies, which trades over $3 billion for Steven Schonfeld’s Schonfeld Strategic Advisors, and Steven Cohen’s Cubist Systematic Strategies, met for lunch to discuss ways to profit from trading cryptocurrencies, according to people close to the matter.
Were Cohen really to taste of the forbidden fruit, he wouldn't exactly be the first. As scores of fund managers recently told BAML, long bitcoin is the most crowded trade in markets today (whatever that means). Even if a future Cohen investment vehicle went short cryptos or attempted an arbitrage strategy, the competition would be steep. Then again, the bulk of the competition is literally a bunch of 26 year-olds whose best strategy idea is buy and hold. You can imagine Cohen licking his chops with carnivorous glee over the prospect of tearing these kids apart.
Stamford Cypto may be unlikely, but dear god would it be entertaining. Who knows what 2018 will bring, but “Steve Cohen Marks Triumphant Return With Bitcoin Bet” seems a pretty appropriate story to get the year going. Hedge fund offices would see client requests for crypto strategies explode. Every major bitcoin price swing would prompt waves of speculation over whether the hand of S.A.C. was at play. Inside sources would reveal that Cohen had repurposed the leftover materials from his personal skating rink to cool a network of high-powered computers cheaply mining cryptos several meters below the surface of his sprawling Stamford estate.
But alas, it may only be a twinkle in the big man's eye. At least for now:
Some large investors continue to drag their feet. Cubist and its sister firm, Point72 Asset Management, for example, have decided not to trade bitcoin or bitcoin futures until the investments have a longer record, according to people close to the matter.
Though who knows. While bitcoin may be a bridge too far for the “family office” of Point72 and Cohen's personal stash, what about for outside investors whose capital will be locked up for a guaranteed minimum of three years? Anything is possible.