Point72 Asset Management in ‘Early Innings’ of ‘Big Crypto Push’

The staffing of Point72 Asset Management’s burgeoning cryptocurrency business is beginning to take shape as the multi-strategy hedge fund firm deepens its efforts in digital assets, according to two sources familiar with the matter.

The company – which is run by founder Steve Cohen and trades in a wide range of traditional financial assets, including equities, commodities and debt – wants to hire a couple of senior blockchain-focused professionals, including a head of cryptotechnology who will report to Mark Brubaker, the company technology manager.

Brubaker, said sources, has conducted interviews with potential candidates in recent weeks, with some introductions in the form of a third-party recruitment outfit focused on crypto.

The second role would be more of a digital asset manager, which would include coordination between middle and back office teams supporting portfolio managers and analysts. Additional employment at junior and intermediate level is underway.

The plan for Point72’s crypto trading – which should build on Cohen’s relatively early venture capital style investments in the space via the family office and the firm’s venture arm – is to start with quantitative trading and build a business model from there.

“These are serious people at a high level [at Point72] who’s getting into crypto now, “said one source.” They’re finally taking it seriously. It’s early, but this looks like the early rounds of a major push. [Cohen] has signed it. “

Prominent hedge funds have largely stayed on the cryptoside line. Before the recent market crash, top financiers were concerned about regulation; They are now also concerned about whether digital assets will continue to fall freely in what has been a tough time entering fast-growing markets.

It is also the not insignificant issue of significant institutional limited partners, especially conservative leaning sovereign wealth funds, who are on guard against the firm and others they invest in pushing into crypto too fast – especially when it is unclear, no doubt, about digital assets have a large enough market value to justify the big tickets Point72 and its rivals must generate meaningful alpha from these trades.

To get started, the company last month installed Jump Trading veteran Elie Galam as head of crypto for the quantum division, Cubist Systematic Strategies, Bloomberg reported. Galam and at least two supportive portfolio managers have been tasked with doing due diligence on trading fairly liquid spot cryptocurrencies with high market value – plus related derivatives.

The firm had already traded digital asset-backed ETFs and similar institutional products, including Grayscale Investments’ Ethereum Trust (ETHE) and Bitcoin Trust (GBTC). The Cubist unit also already trades in certain crypto derivatives.

However, the company does not trade spot digital assets.

Cubist more broadly, meanwhile, is undergoing a bit of an overhaul. The investment staff – traditionally divided into “pods” by portfolio managers and support analysts who refine their own independent strategies included in the firm’s flagship fund – are being reorganized into more of a platform model.

Here’s how it works: Each trader contributes algorithms, or supports article intelligence or machine learning applications, to a masterful quantitative strategy. It is a layout preferred by the likes of DE Shaw and Renaissance Technologies.

Sources were given anonymity to discuss sensitive business. A spokesman for Point72 declined to comment.

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