(Bloomberg) -- Billionaire Steve Cohen’s Point72 Asset Management is preparing to return some capital to investors for the first time, joining multistrategy hedge fund peers looking for ways to restrict their assets after a period of explosive growth.
The firm is considering handing profits to clients after the end of the year, according to people with knowledge of the matter. The amount could run into billions of dollars, the people said, asking not to be identified because the details are private. The people couldn’t say with certainty how much would be returned as the details are yet to be firmed up, and said the plans could still change.
Hedge fund managers typically resort to restricting new money and even return capital to avoid becoming too big, because size can be a hurdle when navigating volatile markets and certain asset classes.
Point72 has raised almost $12.8 billion since 2020 and manages a record $35.2 billion currently. The hedge fund gained about 10% through August this year, or more than $3 billion, Bloomberg News has reported previously. A representative for Point72 declined to comment.
The move is part of an increasing trend in the $4 trillion industry, where the biggest funds with a record of generating steady returns such as Point72, Millennium Management and Citadel get flooded with more cash than they can manage, while a vast majority of smaller firms struggle to raise capital.
Citadel has given back $25 billion to clients since 2017. Millennium has returned about $38 billion since 2020, although much of it came back to the firm in a new share class.
Investors pulled a net $216 billion between 2022 and 2023 and withdrew another $39 billion this year through May, according eVestment. The exodus has contributed to more than 1,000 hedge funds closing since the start of 2022, discouraging startups.
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