Billionaire hedge fund manager Steve Cohen has a new firm that's allowed to raise outside capital.

Cohen indirectly owns "more than 25%" of the newly launched Stamford Harbor Capital and will not supervise anyone working on behalf of it, according to a regulatory filing.

Cohen in January was barred by the SEC from supervising funds that manage outside money until 2018.

The ban was to settle charges for failing to supervise a former portfolio manager who engaged in insider trading at SAC Capital, Cohen's former hedge fund.

SAC pleaded guilty to securities fraud in 2013 and paid a $1.8 billion fine. Cohen, who wasn't charged, returned SAC's outside capital and transformed it into his family office, Point72 Asset Management.

Bloomberg's Miles Weiss first reported on the new firm.

Read the regulatory filing here »

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Visium employees, take note: Steve Cohen doesn't want you.

Point72 Asset Management, the investment firm led by Cohen, is not hiring from Visium Asset Management, the controversial hedge fund that on Wednesday saw some of its employees charged with insider trading, according to three people familiar with the matter.

Cohen is concerned about reputational risk from hiring from a hedge fund under fire, the people said.

The policy predates the announcement of the investigation at Visium from earlier this year, one of the people added.

Point72 put Visium on a "no-fly-zone list" as soon as rumors about a potential investigation began to circulate, the person said.

That spells bad news for workers at Visium. Employees have been looking for havens since the firm came under investigation, according to several people familiar with the situation. They are having more trouble finding new jobs now that charges have become more serious and public, one person said.

Cohen is no stranger to controversy surrounding insider trading. His SAC Capital Advisors at its peak ran $16 billion before the Securities and Exchange Commission shut it down, banning the hedge fund from managing outside money in 2013 after settling insider-trading claims. Cohen pleaded guilty in 2013 to securities fraud and launched Point72 Asset Management a year later as a family office to run his personal fortune.

Since then, Point72 seems to be gearing up to open up as a hedge fund again — meaning it will take outsiders' money — even if it officially is staying mum.

Cohen has steadily been rebuilding his brand, hiring communications consultants and building out an investment research training program for college students and recent grads.

Over the past year, Point72 reps have also taken up the hedge fund conference circuit, with Cohen himself speaking last month at the Milken conference. He said there that it was proving difficult to find talent for the firm.

Point72 says it employs about 1,000 people worldwide, and it has said it won't necessarily accept outside money when a Cohen-led organization is allowed to do so in 2018.

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Steve Cohen has a new mantra: better to be safe than sorry.

Cohen's Point72 Asset Management is taking extra precautions to guard against wrongdoing after Cohen's predecessor hedge fund, SAC Capital Advisors, was shut down for insider trading.

Vincent "Vinny" Tortorella, a cheery Italian-American and former federal prosecutor, is the man charged with the task, having taken over as head of Point72's compliance and surveillance unit in 2014.

Cohen has given Tortorella a blank check to do whatever it takes to keep the firm straight, including an investigative team of more than 50 staffers, including ex-federal agents who track any potential rumors of wrongdoing – both at Point72 and at competitors.

It's a proactive, rather than reactive, strategy, Tortorella told Business Insider in an interview over lunch in Manhattan. Tortorella was accompanied by two of Cohen's in-house public relations pros, also another key to his firm's makeover.

Before the insider trading investigation at Visium Asset Management became public earlier this year, for instance, Point72 put a ban on hiring those who'd recently worked there on the investment side.

Visium isn't the only firm Point72 has banned, either. Tortorella declined to say who else made the list and when exactly the Visium ban came into effect.

Point72's Visium ban contrasts with its hedge fund rivals. Ken Griffin's Citadel, for instance, recently swooped up about 17 traders from one of Visium's funds. Lombard Odier and Caxton Associates also hired Visium traders. The portfolio managers appear to have worked at Visium's global fund, a multisector equity fund that wasn't named in regulators' charges.

Reps for Citadel declined to comment, and Lombard Odier and Caxton didn't respond.

Point72 has good reason to keep strict protocol. The Securities and Exchange Commission in 2013 shut down its $16 billion predecessor, SAC Capital, banning the hedge fund from managing outside money. Cohen pleaded guilty to securities fraud and launched Point72 a year later as a family office to run his billions of wealth. A Cohen-led organization can accept outside investors' money again in 2018.

Since then, Cohen's firm has been beefing up its compliance.

"This can't ever happen again," Cohen told Tortorella when he hired him in 2014, Tortorella said.

The effort hasn't come cheap.

Cohen gave Tortorella veto powers on any potential hire, and Tortorella has used it on potential staffers who would likely have made major money for Point72. The cost of running Tortorella's team, which has grown by about 50% in the last two years, also comes to tens of millions of dollars a year, Tortorella said.

Point72's in-house surveillance team has, on occasion, fired employees who fell out of line, too. For instance, Point72 has restrictions on trading in personal accounts, and requires disclosure. Point72 fired an employee who hid a secret account.

Many in the industry scorn personal trading for the conflicts of interest that arise when traders make investments for themselves rather than for the firm.

Coincidentally, this was also an issue at Visium, where the founder, Jake Gottlieb, made a lucrative bet for himself on a trade the flagship fund also made, Business Insider reported last month. It's unclear if regulators are looking into that trade.

Other measures narrow the flow of info that Tortorella and his team have to sort through in tracking its traders. Tortorella banned instant messaging for analysts and portfolio managers, for instance. Data spying software also helps his team pick through huge flows of information.

Tortorella's team also watches how traders source their investments, such that a trader needs to back up how he or she got every piece of info leading up to a decision, Tortorella said.

Point72 isn't the first hedge fund that Tortorella has been tasked with monitoring.

He spent three and a half years at New York hedge fund Coatue Management as head of proprietary research and general counsel. Before that, he was the chief operating officer and general counsel at Guidepoint, an expert network, and a federal prosecutor in the Department of Justice's criminal division from 2004 to 2008.

The experience has given him a theory about who tends to commit insider trading.

It's not the best investors who are cheating, he said. It's those who are trying to keep their heads above water.

Correction: An earlier version of this story said Point72 had banned trading in personal accounts. It has not. It has restrictions in place, and requires disclosure. 

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Point72 Asset Management, billionaire Steve Cohen's family office, recently brought on Matthew Granade to oversee big data.

Granade oversees data ranging from sell-side research to alternative data that is then incorporated into the firm's quant and fundamental investing strategies.

Point72 manages $11.6 billion, the bulk of which is Cohen's fortune.

Business Insider caught up with Granade, the firm's chief market intelligence officer, last week at the investment firm's New York offices. What follows is an excerpt from the conversation, which Business Insider has edited for clarity and length.

Rachael Levy: Walk me through how Point72 views quant investing.

Matthew Granade: Our longest-serving quant portfolio manager has been here 21 years. And the reason I mention that is there has been a very, very long-standing commitment to quantitative-style investing here. We're very known for our discretionary investing, but Steve has been doing quant investing for a very long time. Cubist, which is run by Ross Garon, is a standalone business. It operates separately from the discretionary long-short business, but quant more broadly, increasingly quant techniques and quant ideas, are infusing themselves everywhere.

Cubist is doing very traditional quant, like stat arb [statistical arbitrage] and using traditional quant data sets. This idea of building equations and using machine learning and breaking your process down, you're starting to see that pop up in the discretionary side of the house as well.

But the difference is the discretionary folks take a very company-centric view of the world. So an analyst on the discretionary side will cover 40 or 50 stocks and will know each of those companies really well, whereas a quant trader will trade 2,000 or 3,000 stocks — they tend to know like a data set or a technique, whereas our discretionary investors really, really know the companies.

But what we're increasingly finding is that data and some of the techniques you can apply to the data are very powerful in the discretionary investment process.

Levy: Would you qualify that as "quantamental"?

Granade: I try not to use the quantamental word because it's sort of more obscuring than clarifying sometimes, but yeah, I think that's exactly right. Sometimes, people present themselves as quantamental and they're not really doing anything that different. It's sort of a different name on old-style quant. But I do think there's a new thing forming, which is fundamental company understanding, quant techniques, alternative data all sort of being done by one person or one team. If you want to call that quantamental, that's my definition of quantamental.

It was funny, I was using "quantamental," but I started encountering more and more people using "quantamental" and not really meaning what I meant, and so then I just stopped. So now I encounter people here and they say, "Isn't that what we call quantamental?" Right now, I don't have a good term.

Levy: So quant techniques using alternative data. You mean using algorithms to parse through this alternative data. The quant techniques were there already. So is the only thing that's new the alternative data?

Granade: I'd say the data is new and the other thing that's new is bringing it all together. Let's say if you go to our most traditional long-short discretionary investor. Most of what they did or do is talk to the companies, get some data from them usually through major releases, talk with the sell side, and the major thing they get from them is models, and then they have an analyst that builds their own model. They might do some more conversations and tweak that model.

Whereas now, what you might do if you're trading Chipotle, let's say, you'd look at the credit-card [data]. Well, that requires a tremendous number of machine-learning techniques to make that data useful and a tremendous number of data science and statistical techniques to make it insightful, and then you get to your financial model and you couple that maybe with geolocation data or some other thing. So that's the new thing.

Traditionally you didn't have someone on a long-short fundamental team who had anywhere near the skills to do this. They were Excel experts and that was the end of it. Whereas now, we have a lot of teams with data scientists on them.

Levy: So is it the case that you have people that are all in one or do you have a sidekick that is going to help me parse through this Chipotle data that would take me years to go through?

Granade: It's kind of both. This team out here, they're building products that everyone on the platform can access. The second thing, instead of hiring an analyst, we are hiring a data scientist. In that case, they're accessing the data directly and building their own models. And the third thing you're seeing is more and more portfolio managers train themselves, with our help sometimes, but also sometimes on their own on all the statistical understanding you need to have to be able to appreciate and use this data well.

Levy: Is it is possible to find the all in one package?

Granade: No, I think it's different things. What you see now is you have a data-science-track-type person, and you have a fundamental-analyst-type person who worked in private equity or investment banking and then came here. And then that person got a masters or Ph.D. in statistics and then went to a startup and came here.

If I think of the portfolio managers of the future, for 10 years from now, I think there's a very good chance that what they do is they have some education in computer science or data science, they then have a job like here in Aperio for three years as a data scientist, then they have some more training as a fundamental analyst and then they start transitioning to be a portfolio manager.

In a seven- to 10-year time frame, the portfolio managers at the top of these things are going to have been trained in all the different pieces, but right now we're still in more of a transition period where we have these two tracks.

Levy: So how does it work if you work here? Do you get training?

Granade: We do data training, statistical training, computer-language training. You have to think the level of the person. If someone is a senior analyst, it's not the right thing to train them to be a programmer — but they do need to understand these data sets and the statistical techniques that can be applied to them.

For our younger analysts, like in the academy, we do teach Excel modeling and a programming language, and we teach statistical techniques and how to do a company interview with the CFO. Those are our 22-year-olds. With our 28-, 30-, 32-year-olds, we do slightly more targeted things.

Levy: How much of quant is just a fad?

Granade: I think quant is a great business. It doesn't come overnight. Steve has been building that business for 21 years. Do I think it's a passing fad? I think people are rushing to the thing that is performing better than other things now — but very few people have the staying power to stay in it. It takes a long-term commitment. You can go look up and see how long DE Shaw and Renaissance [Technologies] have been around. They've all been around since the '90s.

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Doug Haynes, president of New York's Point72 Capital Management, didn't have his sights set on a career in the hedge fund business.

But that's where he ended after a call from legendary money manager Steven Cohen in late-2013.

In a recent interview with Skiddy von Stade of OneWire, Haynes explained his career transition from mechanical engineering to programming for the CIA, and then into McKinsey before eventually ending up at Point72.

"If you have a career in consulting, there's an age by which if you don't retire from being a consultant, you will retire as a consultant," Haynes said. "Once you pass a certain tenure, it doesn't make sense to leave the profession, you don't have enough runway left to go do something else and build that new set of skills."

Haynes, after considering retirement twice, finally took the decision to retire from the firm.

"I decided I'm gonna make the jump. A couple of my friends had done so and were very happy and I just felt like it was right for me, so I retired."

At the time, Steve Cohen had just closed down his hedge fund SAC Capital following an insider trading investigation, and launched Point72, a family office. He called Haynes just before Christmas in 2013, asking him to put together a McKinsey team. Cohen hadn't heard about Haynes' retirement. 

"He says 'I need you to put together a McKinsey team,' and I said 'Tell me about it.' He says 'We've exited all of our outside capital, and we've had a bunch of change, and downsized the firm. We've made all these big changes, and we really need to reset the firm. I want a new strategy,'" Haynes recalled.

"I said that is a great idea. It would be an even better idea if I hadn't retired six weeks ago," he replied.

In the end, Cohen asked him to join the firm as an adviser. 

"We had an explicit agreement that I would do that between six and 12 months, whatever [time] it took to get a strategy in place and [then] I would go on to do whatever it is that I was going to do next."

Cohen joined the firm as managing director of human capital in February 2014, but became Point72's president six months later. "I came as the head of human capital but pretty quickly that mandate spread to touch a lot of different aspects of the firm, and then six months later [Cohen] ends up offering me the opportunity to be president."

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What does Doug Haynes, president of Point72 Asset Management, look for in young people wanting to work for him?

In the second part of an interview with Skiddy von Stade of OneWire, Haynes explained what qualities he looks for when hiring college students for the Point72 Academy. The academy trains students as research analysts for the firm, and Point72 recently expanded the reach of its program to Europe and Asia.

"We like people who have demonstrated grit," he said. "Somebody who has financed their own education, somebody who has had a roll-up-your-sleeves job of one kind or another."

Haynes is also interested in hiring graduates with different experiences.

"We don't want to hire all finance backgrounds, nor do we want to hire necessarily all hard-science backgrounds," Haynes said.

Instead, Point72 looks to candidates who have "a demonstrated interest in the markets," regardless of their background.

Such diversity, Haynes believes, will add value to his firm.

"If everybody sees things the same way, you start to create a lot of risk because all the thinking gets correlated, and when there is a problem, you don't have the diversification of ideas and perspectives that makes you aware of it," he said.

Point72, with headquarters in Stamford, Connecticut, was founded by Steve Cohen in 2014 and manages about $11 billion in assets. Haynes joined the firm in 2014 as managing director of human capital and later became president.

To the graduating class of 2017, Haynes said following your passion is not as important as creating opportunities to learn.

"A young person graduating from college may think that they know what they want to do for the rest of their lives — I can guarantee you it's not true," he said. "I strongly think you make your first decision based on your opportunities to grow personally and professionally and then have an open mind."

Check out the full interview at OneWire »

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Billionaire Steve Cohen has opened a Palo Alto office to invest in early-stage companies focused on big data and machine learning, and he has hired two people who invested on behalf of the CIA.

The two men leading the effort are Daniel Gwak and Sri Chandrasekar, who previously worked at In-Q-Tel, a venture capital firm that is mostly funded by the Central Intelligence Agency.

The pair started their new roles on May 1, according to Matthew Granade, Point72's chief market intelligence officer.

The new Silicon Valley office is part of Point72 Ventures, Cohen's venture capital unit, which is legally separate from his $11 billion family office, Point72 Asset Management. Both manage Cohen's billions. Cohen launched Point72 Ventures last year, hiring Pete Casella of JPMorgan Chase Strategic Investments to help lead the effort.

Point72 Ventures expects to eventually expand its new Palo Alto office and add more staffers, Granade told Business Insider.

"Machine learning and AI are playing an ever increasing role in solving problems," Granade said.

At In-Q-Tel, the CIA venture capital firm, Gwak and Chandrasekar "had a great vantage point in how these companies were getting started, what was working and not working," he added.

Gwak and Chandrasekar didn't respond to requests for comment.

At In-Q-Tel, Gwak focused on enterprise analytics and infrastructure companies, and Chandrasekar led an artificial intelligence lab, according to bios provided by Point72. 

Their new group is tech-focused, and could involve a range of companies, such as those looking at natural language processing, automating trucks or cars, or synthesizing news.

Granade declined to put a figure at how much money the venture arm plans to invest, but said he expected the group to invest in 10 to 20 companies a year.

"Steve [Cohen] has a fairly good sized balance sheet," Granade said. "Because we're operating through Steve, we can be very opportunistic when we're seeing things."

The Intercept reported last year that In-Q-Tel has been specializing in companies that mine data on Twitter and other social networks. And the Wall Street Journal reported that some of In-Q-Tel's board members have ties to some of the companies the fund has invested in. 

The Securities and Exchange Commission in 2013 banned Cohen's $16 billion predecessor firm, SAC Capital, from managing outside money after it pleaded guilty to securities fraud.

Cohen subsequently launched Point72 as a family office to run his billions of wealth. A Cohen-led organization can accept outside investors' money again starting next year.

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The big question in the hedge fund space is whether Steve Cohen's family-office hedge fund will open up to outside capital again.

Speaking at the Absolute Return Symposium in New York on Wednesday, Point72 Asset Management's president, Doug Haynes, hinted at an answer.

He said the firm would consider taking on outside money in the future if it was necessary to meet its long-term goals.

"We are not capital constrained — we are talent constrained," Haynes said.

In January, the Securities and Exchange Commission said Cohen would be barred from running outside money until 2018 as part of a settlement over charges that he failed to supervise a former SAC Capital trader convicted of insider trading.

That opened up a path to managing outside money again. SAC Capital returned capital from outside investors and rebranded itself as Point72 Asset Management after accusations of insider trading at the firm.

Point72 manages the wealth of Cohen and some of the firm's employees. The fund has about $11 billion in assets. As a family office, the firm's growth is based strictly on returns, Haynes said during his talk.

Last year, Point72 posted returns of 15.5%, Haynes said. To put it in perspective, hedge funds on average fell 3.64% in 2015, data from Hedge Fund Research shows.

Haynes said he thought the market environment would be difficult going forward and it could be "rough" in 2016 and possibly 2017.

"We can only keep that going if we keep performing," Haynes said.

Point72's head of human capital, Mike Butler, told Business Insider recently that the firm had been investing heavily in talent. That's because there has been a sea change in the industry, with investment-banking classes shrinking and more young workers heading to Silicon Valley, making it difficult to hire top talent.

Haynes originally joined the firm in 2014 as the head of human capital. He's a former McKinsey director and previously worked for the CIA. Haynes was also responsible for implementing a surveillance program at the fund.

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More and more young candidates for hedge fund positions aren't being completely honest on their résumés.

Of course, they're getting caught, and as expected, they're not landing a job they otherwise may have if they were forthright.

Business Insider recently caught up with Mike Butler, head of human resources at Point72 Asset Management — formerly SAC Capital — the $11.4 billion family-office hedge fund led by billionaire Steve Cohen.

Butler said this was happening more often than you might expect.

"One thing that — and this ties back to ethics and integrity — one of the things I observe more often than you might expect are candidates who are in one way or another, whether it's on their résumé, the application process, the initial interviews, are less than completely forthright.

"There's a gap in their résumé, there's a stumble academically, there's something in their background that they've tried to get cute with or finesse or cover over or be less than direct about."

Butler said this is the quickest way to get screened out of the job-selection process at Point72.

"Life is complicated. People stumble. There are lapses. Fine," he said. "Be straight with us about it."

He said he couldn't pinpoint why he had seen an increase in this kind of behavior but suggested it could be friends or even campus career services encouraging candidates.

He added: "I've seen too many cases where really talented people raise question marks because of how they've handled a bad grade or something else in their background that they weren't completely comfortable being straightforward about."

Another red flag Butler pointed to during the job-interview process was when folks express that money is their motivator for the job.

During our 45-minute conversation, Butler emphasized that the firm was looking for really smart folks with high standards and a real genuine passion for the work.

The firm's compliance department also has the right to veto any candidate.

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In a filing out on Tuesday after the market closed, hedge fund manager Steve Cohen revealed an 8.3% ownership stake in tiny company Celator Pharmaceuticals.

You might recognize the name. Celator shares jumped 432% in trading on Tuesday after announcing a successful test of its new drug targeting a form of leukemia.

Through his family-office fund, Point72 Asset Management, Cohen acquired just over 2.8 million shares on Monday after the news of the successful trial was released.

Tuesday's disclosure came in a 13G filing, required whenever an investor takes a stake in a company equal to more than 5% of a company.

So while this isn't a huge part of Cohen's portfolio — Point72 has around $11 billion in assets — it's not bad for a day's work.

Update: This post has been editied to reflect the timing of Point72's purchase of the Celator position.

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(Reuters) - Billionaire Steve Cohen's investment firm, a family office that took over managing his fortune in 2014 after his hedge fund pleaded guilty to securities fraud, has a perfect regulatory compliance record, its president said on Thursday.

Point72 Asset Management, which manages about $11 billion and took over after regulators barred Cohen's SAC Capital Advisors from dealing with the public, has had “zero point zero” compliance and regulatory problems, Point72 President Doug Haynes said in an interview.

The firm succeeded SAC Capital Advisors, Cohen's hedge fund firm which pleaded guilty to securities fraud in an insider-trading settlement with U.S. regulators that also included a $1.8 billion fine. 

In an interview with Reuters at Point72's Stamford, Connecticut headquarters, Haynes said the firm's compliance culture goes beyond strict legal parameters.

“We have professional standards, and you get fired if you violate them," he said.

Haynes, a veteran of consulting firm McKinsey & Co., said compliance staff has increased 25 percent since Chief Compliance and Surveillance Officer Vincent Tortorella was hired in April 2014.

He said Tortorella, a former federal prosecutor, has changed the way Point72 does surveillance of its investment professionals. The compliance staff includes former personnel from the Central Intelligence Agency, Federal Bureau of Investigation and Securities and Exchange Commission.

It employs technology from the likes of Palantir, a data analysis-focused company used by government agencies and others.

Even so, Point72’s trading still draws attention.     

This week, influential financial blog ZeroHedge asked in a post if Cohen was "back to his criminal ways," suggesting Point72 might have had traded on inside information.

The question came after Celator Pharmaceuticals shares appreciated Tuesday and Wednesday roughly 458 percent. The surge stemmed from news of Celator’s successful test of its new leukemia treatment VYXEOS, which was released on Monday after the market close.

In a filing on Tuesday after the market close, Point72 revealed an 8.3 percent stake in Celator, or over 2.8 million shares.

ZeroHedge asked: "Why did SAC go long Celator Pharmaceuticals in the days immediately preceding the company's March 14 favorable Phase 3 trial result of Vyxeos for Acute Myeloid Leukemia? What was the investment thesis/catalyst for this decision."

A spokesman at Point72 said: “The ZeroHedge post is ... false, wrong and absolutely inaccurate.

“Point72 did not purchase any Celator shares before the company made its March 14th announcement," the spokesman added. "Point72 only purchased Celator shares after the March 14 announcement.”

SEE ALSO: Steve Cohen disclosed a 2.8 million-share stake in a tiny pharmaceutical company that jumped 432% on Tuesday

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Billionaire hedge fund manager Steven A. Cohen has pledged $275 million to support military veterans and their families by opening up free mental-healthcare clinics across the country.

The Cohen Veterans Network officially launched its operations this week. The clinics will treat veterans, free of charge, who suffer from post-traumatic stress (PTS) and other mental health conditions, Cohen and executive director Dr. Anthony Hassan said in a release.

"The wounds of war are serious. It is not easy to serve your country in combat overseas and then come back into society seamlessly, especially if you are suffering," Cohen said in a statement. "These men and women have paid an incredible price and it’s important that this country pays back that debt." 

He continued: "We will treat anyone who served in the U.S. Armed Forces during the war on terror. If you wore the uniform, and you need help, you are welcome at Cohen Veterans Network–period."

More than 2.6 million men and woman have served in the military during the past 14 years of war. Around 20% of veterans experience some form of PTS and traumatic brain injury (TBI), while nearly 40% of returning veterans who suffer from mental health issues don't seek treatment, CVN said in its release.

Over the next five years, Cohen Veterans Network plans to open 20 to 25 clinics. The first four Steven A. Cohen Military Family Clinics, located in New York, Dallas, San Antonio, and Los Angeles, will open by July. The fifth clinic will be in Philadelphia, and it's scheduled to open in the spring of 2017.

Cohen will also pledge an additional $30 million or more through Cohen Veterans Bioscience, CVN's sister organization, for research programs.

On Wednesday evening, Cohen was honored by the Marine Corps-Law Enforcement Foundation, an organization that provides free education for the children of fallen Marines and law enforcement members.

Cohen comes from a military family. His son, Robert, served in the US Marine Corps in Afghanistan and is currently serving in the Reserves. Cohen's father served in the Pacific during World War II.

"My dad taught me to believe that if you worked hard, and took risks, you could succeed in this country. And when my son became a Marine, he taught me that nothing I achieved would have been possible without the men and women of our military," Cohen said during his speech.

"Our lives and our hopes rest on the freedom and security that they provide. We owe our veterans a debt that can never truly be repaid." 

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Point72 Asset Management, the $11 billion family-office hedge fund led by Steven A. Cohen, has officially joined Facebook.

That's because the historically secretive hedge fund is now using social media to attract the next generation.

"Eighteen months ago, the Firm launched a social media project to support our Mission of 'offering the greatest opportunities to the industry's brightest talent,'" Mark Herr, head of corporate communications, wrote in a staff memo seen by Business Insider.

"Our goal was to tailor a strategy to reach potential new employees through the media forms best suited to getting their attention and persuading them to consider Point72 for their careers."

Point72 launched its careers Facebook page on Thursday afternoon. It had previously joined Glassdoor, LinkedIn, and Google+ as part of its social-media push.

"This is the foundation for our efforts to attract the next generation of investment and investment services professionals," Herr wrote.

"We are convinced we offer unparalleled career choices. Our social media presence will mean that the candidates we seek will hear the best argument for why to work here from us directly."

Hedge funds these days are in an arms race against one another to snap up the best talent.

In the memo, Herr pointed to a recent survey of 5,000 banking and finance candidates. Eighty-two percent of the surveyed candidates use careers sites such as LinkedIn and Glassdoor while deciding where they want to apply; 77% use social media; and 76% use Google search.

"Very simply, if you're not looking for the next generation of talent on social media, you're waiting on the wrong corner for your Uber to arrive," Herr wrote.

In a keynote address at a conference earlier this year, Point72's president, Doug Haynes, said the firm was "not capital constrained — but talent constrained."

As a family office, Point72 manages the wealth of Cohen and some of the firm's employees. The fund has about $11 billion in assets. The firm's growth is based strictly on returns.

That means the fund needs the best possible talent.

Point72's head of human capital, Mike Butler, told Business Insider recently that the firm had been investing heavily in talent, particularly growing younger talent through initiatives such as the Point72 Academy.

That's because there has been a sea of change in the industry, with investment-banking classes shrinking and more young workers heading to Silicon Valley, making it difficult to hire top talent.

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Billionaire hedge fund manager Steve Cohen has a new firm that's allowed to raise outside capital.

Cohen indirectly owns "more than 25%" of the newly launched Stamford Harbor Capital and will not supervise anyone working on behalf of it, according to a regulatory filing.

Cohen in January was barred by the SEC from supervising funds that manage outside money until 2018.

The ban was to settle charges for failing to supervise a former portfolio manager who engaged in insider trading at SAC Capital, Cohen's former hedge fund.

SAC pleaded guilty to securities fraud in 2013 and paid a $1.8 billion fine. Cohen, who wasn't charged, returned SAC's outside capital and transformed it into his family office, Point72 Asset Management.

Bloomberg's Miles Weiss first reported on the new firm.

Read the regulatory filing here »

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Visium employees, take note: Steve Cohen doesn't want you.

Point72 Asset Management, the investment firm led by Cohen, is not hiring from Visium Asset Management, the controversial hedge fund that on Wednesday saw some of its employees charged with insider trading, according to three people familiar with the matter.

Cohen is concerned about reputational risk from hiring from a hedge fund under fire, the people said.

The policy predates the announcement of the investigation at Visium from earlier this year, one of the people added.

Point72 put Visium on a "no-fly-zone list" as soon as rumors about a potential investigation began to circulate, the person said.

That spells bad news for workers at Visium. Employees have been looking for havens since the firm came under investigation, according to several people familiar with the situation. They are having more trouble finding new jobs now that charges have become more serious and public, one person said.

Cohen is no stranger to controversy surrounding insider trading. His SAC Capital Advisors at its peak ran $16 billion before the Securities and Exchange Commission shut it down, banning the hedge fund from managing outside money in 2013 after settling insider-trading claims. SAC pleaded guilty in 2013 to securities fraud and Cohen later launched Point72 Asset Management as a family office to run his personal fortune.

Since then, Point72 seems to be gearing up to open up as a hedge fund again — meaning it will take outsiders' money — even if it officially is staying mum.

Cohen has steadily been rebuilding his brand, hiring communications consultants and building out an investment research training program for college students and recent grads.

Over the past year, Point72 reps have also taken up the hedge fund conference circuit, with Cohen himself speaking last month at the Milken conference. He said there that it was proving difficult to find talent for the firm.

Point72 says it employs about 1,000 people worldwide, and it has said it won't necessarily accept outside money when a Cohen-led organization is allowed to do so in 2018.

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Steve Cohen has a new mantra: better to be safe than sorry.

Cohen's Point72 Asset Management is taking extra precautions to guard against wrongdoing after Cohen's predecessor hedge fund, SAC Capital Advisors, was shut down for insider trading.

Vincent "Vinny" Tortorella, a cheery Italian-American and former federal prosecutor, is the man charged with the task, having taken over as head of Point72's compliance and surveillance unit in 2014.

Cohen has given Tortorella a blank check to do whatever it takes to keep the firm straight, including an investigative team of more than 50 staffers, including ex-federal agents who track any potential rumors of wrongdoing – both at Point72 and at competitors.

It's a proactive, rather than reactive, strategy, Tortorella told Business Insider in an interview over lunch in Manhattan. Tortorella was accompanied by two of Cohen's in-house public relations pros, also another key to his firm's makeover.

Before the insider trading investigation at Visium Asset Management became public earlier this year, for instance, Point72 put a ban on hiring those who'd recently worked there on the investment side, Business Insider previously reported.

Visium isn't the only firm Point72 has banned, either. Tortorella declined to say who else made the list and when exactly the Visium ban came into effect.

Point72's Visium ban contrasts with its hedge fund rivals. Ken Griffin's Citadel, for instance, recently swooped up about 17 traders from one of Visium's funds. Lombard Odier and Caxton Associates also hired Visium traders. The portfolio managers appear to have worked at Visium's global fund, a multisector equity fund that wasn't named in regulators' charges.

Reps for Citadel declined to comment, and Lombard Odier and Caxton didn't respond.

Point72 has good reason to keep strict protocol. The Securities and Exchange Commission in 2013 shut down its $16 billion predecessor, SAC Capital, banning the hedge fund from managing outside money. Cohen's hedge fund pleaded guilty to securities fraud and he subsequently launched Point72 as a family office to run his billions of wealth. A Cohen-led organization can accept outside investors' money again in 2018.

Since then, Cohen's firm has been beefing up its compliance.

"This can't ever happen again," Cohen told Tortorella when he hired him in 2014, Tortorella said.

The effort hasn't come cheap.

Cohen gave Tortorella veto powers on any potential hire, and Tortorella has used it on potential staffers who would likely have made major money for Point72. The cost of running Tortorella's team, which has grown by about 50% in the last two years, also comes to tens of millions of dollars a year, Tortorella said.

Point72's in-house surveillance team has, on occasion, fired employees who fell out of line, too. For instance, Point72 has restrictions on trading in personal accounts, and requires disclosure. Point72 fired an employee who hid a secret account.

Many in the industry scorn personal trading for the conflicts of interest that arise when traders make investments for themselves rather than for the firm.

Coincidentally, this was also an issue at Visium, where the founder, Jake Gottlieb, made a lucrative bet for himself on a trade the flagship fund also made, Business Insider reported last month. It's unclear if regulators are looking into that trade.

Other measures narrow the flow of info that Tortorella and his team have to sort through in tracking its traders. Tortorella banned instant messaging for analysts and portfolio managers, for instance. Data spying software also helps his team pick through huge flows of information.

Tortorella's team also watches how traders source their investments, such that a trader needs to back up how he or she got every piece of info leading up to a decision, Tortorella said.

Point72 isn't the first hedge fund that Tortorella has been tasked with monitoring.

He spent three and a half years at New York hedge fund Coatue Management as head of proprietary research and general counsel. Before that, he was the chief operating officer and general counsel at Guidepoint, an expert network, and a federal prosecutor in the Department of Justice's criminal division from 2004 to 2008.

The experience has given him a theory about who tends to commit insider trading.

It's not the best investors who are cheating, he said. It's those who are trying to keep their heads above water.

Correction: An earlier version of this story said Point72 had banned trading in personal accounts. It has not. It has restrictions in place, and requires disclosure. 

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Point72 Asset Management, billionaire Steve Cohen's family office, recently brought on Matthew Granade to oversee big data.

Granade oversees data ranging from sell-side research to alternative data that is then incorporated into the firm's quant and fundamental investing strategies.

Point72 manages $11.6 billion, the bulk of which is Cohen's fortune.

Business Insider caught up with Granade, the firm's chief market intelligence officer, last week at the investment firm's New York offices. What follows is an excerpt from the conversation, which Business Insider has edited for clarity and length.

Rachael Levy: Walk me through how Point72 views quant investing.

Matthew Granade: Our longest-serving quant portfolio manager has been here 21 years. And the reason I mention that is there has been a very, very long-standing commitment to quantitative-style investing here. We're very known for our discretionary investing, but Steve has been doing quant investing for a very long time. Cubist, which is run by Ross Garon, is a standalone business. It operates separately from the discretionary long-short business, but quant more broadly, increasingly quant techniques and quant ideas, are infusing themselves everywhere.

Cubist is doing very traditional quant, like stat arb [statistical arbitrage] and using traditional quant data sets. This idea of building equations and using machine learning and breaking your process down, you're starting to see that pop up in the discretionary side of the house as well.

But the difference is the discretionary folks take a very company-centric view of the world. So an analyst on the discretionary side will cover 40 or 50 stocks and will know each of those companies really well, whereas a quant trader will trade 2,000 or 3,000 stocks — they tend to know like a data set or a technique, whereas our discretionary investors really, really know the companies.

But what we're increasingly finding is that data and some of the techniques you can apply to the data are very powerful in the discretionary investment process.

Levy: Would you qualify that as "quantamental"?

Granade: I try not to use the quantamental word because it's sort of more obscuring than clarifying sometimes, but yeah, I think that's exactly right. Sometimes, people present themselves as quantamental and they're not really doing anything that different. It's sort of a different name on old-style quant. But I do think there's a new thing forming, which is fundamental company understanding, quant techniques, alternative data all sort of being done by one person or one team. If you want to call that quantamental, that's my definition of quantamental.

It was funny, I was using "quantamental," but I started encountering more and more people using "quantamental" and not really meaning what I meant, and so then I just stopped. So now I encounter people here and they say, "Isn't that what we call quantamental?" Right now, I don't have a good term.

Levy: So quant techniques using alternative data. You mean using algorithms to parse through this alternative data. The quant techniques were there already. So is the only thing that's new the alternative data?

Granade: I'd say the data is new and the other thing that's new is bringing it all together. Let's say if you go to our most traditional long-short discretionary investor. Most of what they did or do is talk to the companies, get some data from them usually through major releases, talk with the sell side, and the major thing they get from them is models, and then they have an analyst that builds their own model. They might do some more conversations and tweak that model.

Whereas now, what you might do if you're trading Chipotle, let's say, you'd look at the credit-card [data]. Well, that requires a tremendous number of machine-learning techniques to make that data useful and a tremendous number of data science and statistical techniques to make it insightful, and then you get to your financial model and you couple that maybe with geolocation data or some other thing. So that's the new thing.

Traditionally you didn't have someone on a long-short fundamental team who had anywhere near the skills to do this. They were Excel experts and that was the end of it. Whereas now, we have a lot of teams with data scientists on them.

Levy: So is it the case that you have people that are all in one or do you have a sidekick that is going to help me parse through this Chipotle data that would take me years to go through?

Granade: It's kind of both. This team out here, they're building products that everyone on the platform can access. The second thing, instead of hiring an analyst, we are hiring a data scientist. In that case, they're accessing the data directly and building their own models. And the third thing you're seeing is more and more portfolio managers train themselves, with our help sometimes, but also sometimes on their own on all the statistical understanding you need to have to be able to appreciate and use this data well.

Levy: Is it is possible to find the all in one package?

Granade: No, I think it's different things. What you see now is you have a data-science-track-type person, and you have a fundamental-analyst-type person who worked in private equity or investment banking and then came here. And then that person got a masters or Ph.D. in statistics and then went to a startup and came here.

If I think of the portfolio managers of the future, for 10 years from now, I think there's a very good chance that what they do is they have some education in computer science or data science, they then have a job like here in Aperio for three years as a data scientist, then they have some more training as a fundamental analyst and then they start transitioning to be a portfolio manager.

In a seven- to 10-year time frame, the portfolio managers at the top of these things are going to have been trained in all the different pieces, but right now we're still in more of a transition period where we have these two tracks.

Levy: So how does it work if you work here? Do you get training?

Granade: We do data training, statistical training, computer-language training. You have to think the level of the person. If someone is a senior analyst, it's not the right thing to train them to be a programmer — but they do need to understand these data sets and the statistical techniques that can be applied to them.

For our younger analysts, like in the academy, we do teach Excel modeling and a programming language, and we teach statistical techniques and how to do a company interview with the CFO. Those are our 22-year-olds. With our 28-, 30-, 32-year-olds, we do slightly more targeted things.

Levy: How much of quant is just a fad?

Granade: I think quant is a great business. It doesn't come overnight. Steve has been building that business for 21 years. Do I think it's a passing fad? I think people are rushing to the thing that is performing better than other things now — but very few people have the staying power to stay in it. It takes a long-term commitment. You can go look up and see how long DE Shaw and Renaissance [Technologies] have been around. They've all been around since the '90s.

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Doug Haynes, president of Point72 Asset Management, didn't have his sights set on a career in the hedge fund business.

But that's where he ended after a call from legendary money manager Steven Cohen in late-2013.

In a recent interview with Skiddy von Stade of OneWire, Haynes explained his career transition from mechanical engineering to programming for the CIA, and then into McKinsey before eventually ending up at Point72.

"If you have a career in consulting, there's an age by which if you don't retire from being a consultant, you will retire as a consultant," Haynes said. "Once you pass a certain tenure, it doesn't make sense to leave the profession, you don't have enough runway left to go do something else and build that new set of skills."

Haynes, after considering retirement twice, finally took the decision to retire from the firm.

"I decided I'm gonna make the jump. A couple of my friends had done so and were very happy and I just felt like it was right for me, so I retired."

At the time, Steve Cohen had just closed down his hedge fund SAC Capital following an insider trading investigation, and launched Point72, a family office. He called Haynes just before Christmas in 2013, asking him to put together a McKinsey team. Cohen hadn't heard about Haynes' retirement. 

"He says 'I need you to put together a McKinsey team,' and I said 'Tell me about it.' He says 'We've exited all of our outside capital, and we've had a bunch of change, and downsized the firm. We've made all these big changes, and we really need to reset the firm. I want a new strategy,'" Haynes recalled.

"I said that is a great idea. It would be an even better idea if I hadn't retired six weeks ago," he replied.

In the end, Cohen asked him to join the firm as an adviser. 

"We had an explicit agreement that I would do that between six and 12 months, whatever [time] it took to get a strategy in place and [then] I would go on to do whatever it is that I was going to do next."

Haynes joined the firm as managing director of human capital in February 2014, but became Point72's president six months later. "I came as the head of human capital but pretty quickly that mandate spread to touch a lot of different aspects of the firm, and then six months later [Cohen] ends up offering me the opportunity to be president."

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What does Doug Haynes, president of Point72 Asset Management, look for in young people wanting to work for him?

In the second part of an interview with Skiddy von Stade of OneWire, Haynes explained what qualities he looks for when hiring college students for the Point72 Academy. The academy trains students as research analysts for the firm, and Point72 recently expanded the reach of its program to Europe and Asia.

"We like people who have demonstrated grit," he said. "Somebody who has financed their own education, somebody who has had a roll-up-your-sleeves job of one kind or another."

Haynes is also interested in hiring graduates with different experiences.

"We don't want to hire all finance backgrounds, nor do we want to hire necessarily all hard-science backgrounds," Haynes said.

Instead, Point72 looks to candidates who have "a demonstrated interest in the markets," regardless of their background.

Such diversity, Haynes believes, will add value to his firm.

"If everybody sees things the same way, you start to create a lot of risk because all the thinking gets correlated, and when there is a problem, you don't have the diversification of ideas and perspectives that makes you aware of it," he said.

Point72, with headquarters in Stamford, Connecticut, was founded by Steve Cohen in 2014 and manages about $11 billion in assets. Haynes joined the firm in 2014 as managing director of human capital and later became president.

To the graduating class of 2017, Haynes said following your passion is not as important as creating opportunities to learn.

"A young person graduating from college may think that they know what they want to do for the rest of their lives — I can guarantee you it's not true," he said. "I strongly think you make your first decision based on your opportunities to grow personally and professionally and then have an open mind."

Check out the full interview at OneWire »

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Billionaire Steve Cohen has opened a Palo Alto office to invest in early-stage companies focused on big data and machine learning, and he has hired two people who invested on behalf of the CIA.

The two men leading the effort are Daniel Gwak and Sri Chandrasekar, who previously worked at In-Q-Tel, a venture capital firm that is mostly funded by the Central Intelligence Agency.

The pair started their new roles on May 1, according to Matthew Granade, Point72's chief market intelligence officer.

The new Silicon Valley office is part of Point72 Ventures, Cohen's venture capital unit, which is legally separate from his $11 billion family office, Point72 Asset Management. Both manage Cohen's billions. Cohen launched Point72 Ventures last year, hiring Pete Casella of JPMorgan Chase Strategic Investments to help lead the effort.

Point72 Ventures expects to eventually expand its new Palo Alto office and add more staffers, Granade told Business Insider.

"Machine learning and AI are playing an ever increasing role in solving problems," Granade said.

At In-Q-Tel, the CIA venture capital firm, Gwak and Chandrasekar "had a great vantage point in how these companies were getting started, what was working and not working," he added.

Gwak and Chandrasekar didn't respond to requests for comment.

At In-Q-Tel, Gwak focused on enterprise analytics and infrastructure companies, and Chandrasekar led an artificial intelligence lab, according to bios provided by Point72. 

Their new group is tech-focused, and could involve a range of companies, such as those looking at natural language processing, automating trucks or cars, or synthesizing news.

Granade declined to put a figure at how much money the venture arm plans to invest, but said he expected the group to invest in 10 to 20 companies a year.

"Steve [Cohen] has a fairly good sized balance sheet," Granade said. "Because we're operating through Steve, we can be very opportunistic when we're seeing things."

The Intercept reported last year that In-Q-Tel has been specializing in companies that mine data on Twitter and other social networks. And the Wall Street Journal reported that some of In-Q-Tel's board members have ties to some of the companies the fund has invested in. 

The Securities and Exchange Commission in 2013 banned Cohen's $16 billion predecessor firm, SAC Capital, from managing outside money after it pleaded guilty to securities fraud.

Cohen subsequently launched Point72 as a family office to run his billions of wealth. A Cohen-led organization can accept outside investors' money again starting next year.

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