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Steve Cohen's hedge fund investing in trading talent

February 9
10:23 AM 2016

The pouching for right talent is on the rise among the hedge funds. Considering the huge demand for the skilled professionals in the financial services segment, billionaire Steve Cohen-owned hedge fund Point72 Asset Management is investing in cultivating its own talent pool. Despite the talent crunch and in general crisis, the hedge fund industry is growing. 

Several hedge funds are competing with each other to snap up right talented professionals. The varied factors are making it difficult for hedge funds in the hiring process, according to a latest report from Barclay's Capital Solutions Group. The confluence of trends is not giving a clarity on future course of direction for the hedge funds. 

Business Insider reports that the financial services sector is not a better option for majority of youngsters. Steve Cohen-led $11.4-billion Point72 Asset Management, formerly SAC Capital, launched Point72 Academy to train college students for analyst positions. This is a 15-month paid program. The Academy is also offering a 10-week summer program. 

The latest trend indicates young graduates are heading towards Silicon Valley rather than choosing financial segment. Mike Butler, head of human resources at Point72 Asset Management, said: "This is a trend we're seeing in the industry, particularly with young folks heading to Silicon Valley instead of finance. Financial services segment is not the draw for the best talent that it once was."

The hedge fund and asset management activities are being closely monitored by market regulators. The US regulators last month barred Steven Cohen from supervising funds managing outside money. The ban is effective till 2018. The Securities and Exchange Commission (SEC) has taken decision over Cohen's failure to effectively monitor a former portfolio manager Mathew Martoma, who was convicted for insider trading, according to CNBC.

After the financial crisis and due to some regulations, the trading, sales and volumes in the capital markets are in fact shrinking. Hence, the class sizes for investment banks that's discouraging talent pool to shy away from this segment. The talented young generation has lot of opportunities whether in Silicon Valley or entrepreneurial activity.

The challenging conditions in the financial markets are further highlighting the need for talented professionals for the asset management firms. The sluggish markets are disappointing investors. The volatility fears are gripping the markets from all sides. According to a data for 2015, the alternative asset managers manage a record $7.4 trillion, a rise of $500 billion from $6.9 trillion in 2014, according to Preqin, an investment research firm. US investors are reducing their exposure to equities, as reported by AllAboutAlpha.

The response from young graduates for the training program is quite encouraging. Point72 Asset Management received 1,500 applications for 15 slots for the summer program. The number of applications for the inaugural class of 2015 was 400 and it rose to over 1,500 for 2016. Point72 will also identify superior analysts in other hedge funds and hire them as portfolio managers. 

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