Hedge fund manager Steve Cohen is raising a new fund that will invest in private companies.
Cohen wants to raise $500 million to $900 million this year for the vehicle, which is called Point72 Hyperscale, according to a person familiar with the matter. The fund will make venture and private equity investments in the artificial intelligence arena and take majority stakes in operating companies where that technology can be applied.
Point72 is the latest hedge fund to push into private markets as interest in such investments has soared. Driving the trend are clients who want higher yielding growth assets and are seeking to diversify their portfolios. Private equity funds that began investing last year raised about $465 billion in 2019, according to data compiled by Bloomberg.
“Steve has been investing in companies for nearly three decades. We are always exploring new business and investing opportunities,” said spokeswoman Tiffany Galvin-Cohen.
Dan Sundheim’s equity-focused D1 Capital Partners invests about a third of its assets in private ventures, while Philippe Laffont’s Coatue Management has launched its fourth private fund.
Hyperscale will focus on companies that have low margins and high employee turnover, the person said. Point72’s Chief Market Intelligence Officer Matthew Granade will run the unit. Sri Chandrasekar and Dan Gwak will have day-to-day management responsibilities. The Wall Street Journal earlier reported the news.
Cohen has increasingly turned his attention to investing in private companies. In 2016, he started Point72 Ventures which uses his own money to make investments in private fintech, AI and enterprise technology companies.
Earlier this year, the unit led a fundraising round in the startup Brace, which builds technology for the mortgage-servicing industry. It has also backed Mexico-based online lender Credijusto and analytics firm Flybits. About two years ago, Cohen explored investing in tech startups in Asia.
Still, risks abound in this space. A number of firms have been stung after taking stakes in companies that have disappointed, such as Juul Labs Inc.
This article was provided by Bloomberg News.
