Steven Cohen’s Point72 has finally won approval to operate directly in the UK, a decade after the US trader’s previous firm pleaded guilty to insider trading and paid a record $1.8bn in fines.
Point72, a former family office that opened to outside investors in 2018 and which manages $26.7bn in assets, succeeded in its years-long attempt to receive regulatory authorisation last week, according to the Financial Conduct Authority’s website.
The firm will be able to offer its funds to UK investors under the name Point72 Europe (London).
The regulator’s decision comes after it twice rebuffed Point72’s applications and after Cohen’s previous firm SAC Capital was sanctioned in 2013.
Cohen was never personally charged with insider trading but was barred from supervising funds that managed outside money as part of the settlement, while several of his fund managers were convicted and sentenced to prison terms.
In 2017 his new entity, Point72, was given an indication by the FCA, which had been wary of giving its approval before the end of the US regulator’s ban, that it would be rebuffed in its push for authorisation.
The following year, after the firm had reopened as a hedge fund, it was blocked by the UK regulator, which ruled that Cohen was not “fit and proper” to offer the fund to UK clients.
A spokesperson for Point72 said: “London is a key financial centre and home to some of our industry’s brightest talent. We welcome our authorisation with the FCA and look forward to continuing to grow our business in the UK.”
The lack of authorisation had not prevented Point72 from running two offices in London’s upmarket St James’s district, where it has 37 trading teams and more than 230 staff.
But it had stopped it offering the fund to UK investors and had meant it had to operate using a third-party firm.
The approval is also a symbolic step for the firm, potentially making it easier to attract and retain talented traders and also allowing it to expand its US private equity business to London more easily.
“Where firms can demonstrate they meet the standards necessary for authorisation, the FCA has no right to refuse,” an FCA spokesperson said.
Granting authorisation allows the regulator to have a tighter grip on Point72 and to make the firm more directly accountable, said a person familiar with the regulator’s thinking.
It also allows regulators to request information from Point72, something they were unable to do when Point72 operated through a third-party firm. That helps with the UK regulators’ broader efforts to better understand the flow of money around non-bank financial institutions which they see as being a key source of unchecked systemic risk.
To meet the FCA’s requirements, Point72 had to have senior managers in place responsible for leading its UK activities who are answerable to the regulator for any misconduct. Cohen is not among those managers, the person said.
SAC’s past troubles do not appear to have reduced investor appetite for Point72. In 2018 Cohen told an audience that raising $5bn from investors “was actually not that hard”. In 2021 the group raised a further $1.5bn after it provided emergency financing to Melvin Capital, the hedge fund at the centre of the GameStop short squeeze.
