Steve Cohen’s family office Point72 Asset Management is on the hunt for “rogue nerds” and has stepped up the search for talent by scouring the junior ranks of investment banks and top hedge funds as it expands its academy programme.
Jaimi Goodfriend, head of Point72's training Academy, says the firm started ‘Academy 2.0’ earlier this year. Its purpose is to target people after two or three years in the industry. The initial intake, in the spring, was around five people, who were offered the chance to do an “accelerated Masters degree” while working at Point72.
“We had people apply from Goldman Sachs’ equity capital markets team, an economist from Washington DC, and the more traditional investment banking background,” says Goodfriend.
Point72 also launched an online trading game with fintech start-up Tiingo. It’s essentially a way of uncovering people around the world without “putting boots on the ground”, says Goodfriend, and finding trading talent based on their ability relative to their peers, rather than what’s on their resume. The winners are invited to interview at Point72.
“We want to look beyond the traditional finance majors. There might be a rogue nerd studying computer science, or music, history or geography students who have a passion for investing,” she says.
Point72 is not a hedge fund. Officially, it’s a family office overseeing the estimated $11bn fortune of its founder Steve Cohen. But the firm is still staffed by traders and portfolio managers who worked for Cohen’s former $14bn hedge fund, SAC Capital Advisors. He was banned from managing outside capital after an insider trading scandal at the firm, but is reportedly seeking to raise $20bn for a new hedge fund set to launch early next year.
Point72 has been expanding; it now has 1,150 employees after relaunching its London office in 2015 and embarking on a massive hiring spree in Asia. But Cohen has publicly bemoaned the lack of decent talent on the market, and the Academy – essentially its graduate training programme – was launched in response to this.
Competition is tough. In total, Goodfriend says the Academy received 12,000 applications this year for 18 places globally. Of these, 5,000 were for its ‘international’ programme, which is in London and Hong Kong. Goodfriend says that the assessment process is “highly rigorous” and typically involves 6-7 rounds of interviews, and testing on everything from investment prowess to ethics. She said that Point72 is looking for a “diversity of talent” and does not have any formal GPA target for the people it takes on, although she acknowledges that they are “not looking for C students”.
Goodfriend spent nine years as an equity analyst, both on the sell-side and at hedge funds including Citadel and Balyasny Asset Management, before moving into academia as a lecturer at DePaul University and as director of the investment banking academy at the University of Illinois at Urbana-Champaign. She spent years guiding students into financial services roles, and says that her background seeing talented individuals miss out on banking and hedge fund jobs because they didn't have the right background has influenced a less rigid recruitment approach at Point72.
While Point72 may be looking for liberal arts students and qualities that match its culture and outlook, it’s also trying to cast a wider net for its new hires. “The best talent is no longer going directly to Wall Street,” says Goodfriend. “It’s going to Silicon Valley, or to start-ups. We therefore have to change the way we source talent.”
Point72 has traditionally been a discretionary fund manager, and two third of its investments are managed this way. It also has its own systematic fund called Cubist. Point72 is already moving slowly towards automation – it’s reportedly testing models that mimic the trades of its top portfolio managers. As more hedge funds move towards a quantitative approach, and also rely on huge quantities of third party data, Point72 is changing the way it trains its new recruits.
Now, all new academy recruits will undergo 100 hours of “structured curriculum” on data science, says Goodfriend. “The next generation of money managers will have to understand big data,” she says. “It’s not widely taught on Wall Street. We view it as a way of staying ahead.”
Overall, the Academy runs 2,500 hours of study across 10 months, during which students get to grips with the fundamentals of finance and covers everything from accounting, statistics and economics to coding and data science.
The programme runs for a total of 15 months, and towards the end, the students spend time rotating across all of Point72’s investment teams. Goodfriend says that almost everyone has accepted a full-time offer at the end of the programme. Those that didn’t, decided to pursue a career outside of finance. “We had one guy who decided he didn’t like spreadsheets. Clearly, that was not going to work,” she said.
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