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Steve Cohen’s Point72 to Redeem $750 Million From Hedge Fund Melvin

(Bloomberg) — Steve Cohen’s Point72 Asset Management is pulling the $750 million it invested in Melvin Capital Management.

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Point72 will be redeeming the money in portions over time, starting shortly, according to people familiar with the matter. Cohen’s firm follows Citadel in such a move. The latter began asking for some of its cash back last year and by January had requested to receive about $1.5 billion of the $2 billion it invested.

Representatives for Point72 and Melvin declined to comment.

Read more: Citadel to Further Trim $2 Billion Melvin Capital Investment

Point72, as well as Citadel funds and firm partners, made the cash infusion into Gabe Plotkin’s fund in January 2021, when Melvin was dealing with a Reddit-inspired short squeeze that led to its losing nearly 55% that month, erasing about $7 billion of capital. In exchange, the investors received a non-controlling revenue share in the hedge fund.

While Melvin managed to rebound from that tumultuous month, it ended last year down 39%. This year it lost 15% in January, and fell another 2.8% in February, a person said, as inflation concerns and Russia’s invasion of Ukraine upended markets. As of March 1, Melvin ran $10 billion.

Read more: Citadel, Point72 Back Melvin With $2.75 Billion After Losses

Point72 has another, separate investment in Melvin — and that pool of money has remained untouched, a person said. It invested $200 million in Melvin back when Plotkin first started his firm in 2014, and that sum grew to about $1 billion by the end of 2020 as the fund posted multiple years of double-digit returns.

Cohen has known Plotkin since 2006 and has described him as “an exceptional investor.” Plotkin had worked at Cohen’s predecessor firm, SAC Capital Advisors, for eight years and Melvin had been one of its most successful spinouts.

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