OK, Family Capital knows a bit about family offices, but last week we came across one that even surprises us in respect to the number of people it employs - 1,000. Yes, that’s right, a staff of 1,000 - and they’re looking to hire more people.
The family office is called Point72 Asset Management and it manages the money of the hedge fund guru Steven Cohen. It has its main offices in Stamford, Connecticut - apparently America’s second biggest financial district after New York City. But it also has offices in London, Hong Kong, Tokyo, and Singapore. The London office is the one looking to hire new staff, according to reports.
Cohen made his money as one of Wall Street’s most successful hedge fund managers. According to Forbes, he’s worth $12 billion, making him the 37th wealthiest individual in the world.
Point72 is one of these new family offices that use to be a hedge fund, but converted itself into a family office because of new Securities and Exchange Commission rules. Also, Cohen’s hedge fund S.A.C. Capital Advisors got into trouble with the SEC and the Department of Justice over insider trading allegations a few year back, which saw one of its portfolio managers Mathew Martoma sent to jail for nine years.
After this, Cohen reckoned the sensible thing to do was to return clients’ money and convert SAC into a family office, and change its name. He’s following a trend among hedge fund managers, as Family Capital has reported on before.
Point72's website says that it managers the money of Cohen and “eligible employees”. But, here’s the thing - does it take 1,000-plus staff to manage the money of one individual and a few staff? Obviously it does, or Point72 wouldn’t be a viable business.
But just think of the enormous wage bill. Let’s say the average of all the salaries is a very conservative $100,000 a year for each person working there. If that’s the case, the annual wage bill could be as much as $100 million. Even for the 37th wealthiest individual in the world that’s a lot of money.