New York Mets owner Steve Cohen’s Point72 hedge fund generated more than $2.4 billion in profits for investors last year.
Point72, whose headquarters are located in Stamford, Conn., posted a 10.3% net gain in 2022 despite economic headwinds, according to data from LCH Investments, which was cited by Financial Times.
Cohen, whose net worth has been valued by Bloomberg at nearly $13 billion, pocketed $1.7 billion in personal capital gains from his hedge fund, according to Institutional Investor.
Cohen’s investment firm makes its money through what is known as a long-short equity strategy. In other words, Point72 takes a long position on underpriced stocks while selling short positions on securities that are overvalued.
According to Institutional Investor, Point72 made most of its money by betting against equities and betting that interest rates would rise. The Federal Reserve has been aggressive in hiking interest rates as part of a strategy to tame record levels of inflation.
Cohen’s windfall from 2022 should be reassuring to Mets fans who have been ecstatic with his aggressive signing of high-priced free agents.
The Mets added Cy Young Award winner Justin Verlander to its pitching staff, signing him away from the Houston Astros.
Cohen, who bought the Mets from the Wilpon family for $2.4 billion in 2021, nearly snagged star short stop Carlos Correa, but questions about the slugger’s ankle injury raised doubts among Mets management that he was worth the 12-year, $315 million investment.
Correa ended up returning to the Minnesota Twins.
Point72 was indirectly victimized by the “meme stock” craze which put a squeeze on short-sellers such as Melvin Capital, a hedge fund that counted Cohen’s firm as one of its investors.
Melvin Capital lost an eye-popping $6.8 billion — more than half of its assets under management — in January 2021, when retail investors banded together on Reddit and bought up shares of distressed stocks such as AMC and GameStop — artificially inflating the share prices.
Hedge funds and other short-sellers were thus forced to buy up more shares of the distressed stock in order to cover their bets — causing a spike in the stock price.
Point72 invested $750 million in Melvin Capital. Cohen’s firm redeemed the investment in March of last year.
Users on the Reddit board “WallStreetBets” openly targeted Cohen and his fund on the platform with one taunting “Mets owners and losing all their money in the stock market. Name a more iconic duo.”
Cohen, who has upended Major League Baseball with his record-high spending spree that has catapulted the Mets’ payroll to the stratosphere, founded Point72 in 1992.
The firm, which has $26.7 billion in assets under its management, is the successor to Cohen’s SAC Capital Advisors, which in 2014 pleaded guilty to federal insider trading charges and paid a $1.8 billion fine.