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Tags: steve cohen hedge fund manager | mets | data anlytics | money ball | sabermetrics

Steve Cohen Brings Hedge Fund Analytics to Power Mets

Pete Alonso
New York Mets' Pete Alonso runs to first base for an RBI single during the second inning in the first baseball game of a doubleheader against the Atlanta Braves, Tuesday, May 3, 2022, in New York. (AP Photo/Frank Franklin II)

By    |   Thursday, 12 May 2022 02:19 PM

Can a hedge fund honcho pull off another baseball miracle like Billy Beane did for the 2002 Oakland Athletics, as portrayed in “Moneyball,” starring Brad Pitt?

Steve Cohen, owner of Point72 and the New York Mets, is hoping blending advanced hedge fund data analytics with the storied New York franchise will produce a winning combination, The Wall Street Journal reports. Cohen has also set aside $254.5 million in capital for blockbuster player signings.

Several executives of Point72 are involved in the operations of the Mets, and Cohen is hoping that new levels of participation can bring the team to the top of its game.

Cohen’s end run is not only to make the Mets MLB’s richest club—but also the smartest.

Cohen has tapped Sandy Alderson, an analytics enthusiast, as team president. The hire of experienced data engineer Mateusz Tomżyński to both Point72 and the Mets is another example of cross pollination.

The shrewd hedge fund manager is also tackling tech issues that have plagued the team, like a lack of motion capture software at CitiField, a weak data pipeline, and higher-speed iPad connectivity for players looking to hone their skills, the New York Post reports. 

The Mets now employ 35 data analytics employees, many of whom are connected to Point72. This number has grown from just eight, when Cohen bought the franchise.

Officially, the hedge fund and the Mets are separate, with Point72 spokesperson Tiffany Galvin-Cohen telling WSJ: “No Mets-related costs are passed through to P72 investors in any way.” Despite the statement, the overlap in employees between the organizations—and the potential for sabermetrics or other sophisticated data analytics—is substantial.

The Mets’ treasurer, Steve Canna, is also the head of tax for Point72. The Mets’ Chief Technology Officer (CTO), Mark Brubaker, has the same position as Point72’s CTO. Point72’s Human Resources Chief Ariel Speicher, runs HR for the Mets, as well. Several employees who work for Point72 also work for the Mets on specific projects.

In another nod to Cohen’s natural obsession with numbers, the Mets’ director of baseball analytics, Ben Zauzmer, was promoted to assistant general manager,

Some Point72 investors are displeased over Cohen’s involvement with the Major League Baseball team, worried that the New York Mets will distract the hedge fund manager from the business at hand: making money.

Additional distractions may include Cohen’s run-ins with the SEC over his employees' inside trading in 2013, as well as the severe losses Point72 took during the GameStop short squeeze in January 2021.

Cohen, however, seems to be taking it all in stride, telling an investing conference in Manhattan, “I’ve got three jobs. I run my firm, I run the Mets, and I trade a portfolio at my firm.”

Cohen, of course, is best known for his $1.8 billion settlement with the Securities and Exchange Commission in 2016 for insider trading at S.A.C. Capital. As part of that deal, Cohen agreed not to manage outside money for two years.

For its part, Point72 is performing well in some respects, gaining about 3.5% as the S&P 500 fell nearly 13% year-to-date through April. Over the past three years, Point72 has averaged about 12% returns, behind other hedge funds, including Millennium Management and Balyasny.

The Mets, on the other hand, have one of the top five records in the league, and are buoyed by the talented hitting skills of Jeff McNeil and Pete Alonso. Despite the pandemic, revenue hit an impressive $153 million last year, and after Cohen poured $50 million of his own capital into CitiField, credit ratings for the stadium’s bonds increased, Forbes reports.

While it is too early to truly compare Steve Cohen to Moneyball protagonist Beane, Cohen’s hiring of data analytics pros and strategic spending to overhaul the team has undoubtedly given the Mets early success this season, making comparisons to Oakland’s 2002 record-breaking season apt.

For executives and those watching Cohen’s moves, it appears the bases are loaded. Will the Mets score a grand slam, as in a World Series championship? We will find out in October.

© 2022 Newsmax Finance. All rights reserved.


StreetTalk
Can a hedge fund honcho pull off another baseball miracle like Billy Beane did for the 2002 Oakland Athletics, as portrayed in "Moneyball," starring Brad Pitt?
steve cohen hedge fund manager, mets, data anlytics, money ball, sabermetrics
670
2022-19-12
Thursday, 12 May 2022 02:19 PM
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