24 June, 2022

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EXCLUSIVE: Interview with Point72 Founder and CEO Steve Cohen

“I’m not shorting New York City.”

Steve Cohen is the Founder and CEO of Point72, a hedge fund which employs over 1600 individuals, and manages $19 billion in assets, with 11 different offices around the globe. Throughout his career Steve has donated hundreds of millions of dollars to a variety of charitable causes, and founded three philanthropic organizations: The Steve and Alexandra Cohen Foundation, the Cohen Veterans Network, and Cohen Veterans Bioscience. In November 2020 Steve purchased the New York Mets, and has since devoted countless hours to improving the team, as well as exploring new avenues for COVID relief such as converting the entirety of Citi Field into a 24/7 COVID testing center and vaccination hub.

You can watch the full interview here: https://www.youtube.com/watch?v=zCZ_J3a9p94

The following is a lightly edited transcript of the interview.

JORDAN: Growing up in Long Island, what first drew you to a career in finance?

STEVE: It just kind of happened from certain people influencing me. My grandmother used to talk about stocks, we used to have a lady who would take care of us when my parents went away on vacation and she used to talk about stocks and that really intrigued me. It percolated in my brain and when I was 12 or 13 years old I started investing with whatever money I had – Bar Mitzvah money and all that stuff. From there it just became something I did. I used to read the sports page in the New York Post and then the financial pages were right after it. It was natural just to keep going. I liked math and I liked numbers and so it grew from that.

JORDAN: So it was something you really enjoyed, even as a young kid?

STEVE: Oh yeah. I used to sit in brokerage firms when I was 14 years old and just watch the tape. I actually got a job next to a brokerage firm because I wanted to be that close to the office. I was obsessed with it.

JORDAN: And is that what pushed you to go to Wharton and study business there?

STEVE: Well I applied to a bunch of schools, and when I got into Wharton I was going because it was Wharton. I always had a business mind and so I naturally gravitated towards that.

JORDAN: While you were there did you ever consider other business ventures outside of the sales and trading world?

STEVE: No. I knew I was going to be involved in investing in some way. I used to spend most of my day at brokerage firms in Center City, Philadelphia instead of going to classes. I would stand outside these firms and look through the glass and one day they invited me in. I went every day – it was almost my job. I actually worked on the Philadelphia Stock Exchange one summer, and I was investing my own money with some friends. I’d read anything I could on investing, business, and go to the library and get every magazine and paper I could find.

JORDAN: Well clearly it paid off. Do you think that undergraduate business programs are the best or some of the best ways to prepare for pursuing that sort of career?

STEVE: Well you can do that in grad school too. Anyone born today is probably going to live to 100 given all the medical advances, so whether you do it when you’re 19 or 23 doesn’t matter.

JORDAN: Does Point72 care whether someone has attended one of those programs?

STEVE: Actually we have an academy that takes undergraduate kids and trains them to be analysts. We have 14,000 applicants and 40 spots. It’s highly competitive so we’re hiring the best and brightest.

JORDAN: That’s fantastic! Later in life you developed one of the most impressive modern art collections in the world. Was that something you were always interested in or did that appreciation come later?

STEVE: That came later. I didn’t have that sort of exposure as a kid. I wasn’t brought up that way – going to museums or the like – but I had people working for me and they were collecting so I went down with them and then I got hooked, and once I get into something I go full throttle.

JORDAN: Has your experience picking stocks changed the way you value art?

STEVE: I try not to value art as investments. Investing is more of a science, art is more about understanding that particular artist and then on top of that, it’s really more about whether or not you love the piece. If I love a piece, I’ll probably pay more than most. I treat my art collection differently than my investments. I do it out of love and because there’s something about the piece that gets me going. If I look at a piece and it’s still on my mind two or three days later, I know I want it.

JORDAN: Well that’s really lovely. From running Point72 to the Mets, you’re obviously a guy with a lot on his plate. Most kids my age going through the college process or just trying to get through high school in general really struggle with time management. What’s the secret to doing it all so well?

STEVE: Well first you assume I’m doing it well. I’m trying to deal with the Mets which is obviously an additional thing on my plate, and being home certainly helps. I have the time to run the Mets, Point72, and a personal investment portfolio. Once COVID’s over and I’m out in the world again, burdened by all sorts of distractions, I may have to give up trading and just run Point72 and the Mets. What you don’t want is to do three things poorly. I’d rather do two things well and give up one thing. My firm is so big today that my portfolio is only a small part of the profitability – I have a real business. That’s the thing that drives me. I care about the business more than my own trading. You’ve got to be adaptable and you’ve got to be flexible. One door closes and another one opens.

JORDAN: Switching gears for a little bit, of your three main charitable foundations, two of them are centered around veterans. It’s a really great thing that you’ve chosen to focus on that community. Given all the work you’ve done for veterans, do you believe military service should be compulsory, or did you yourself consider serving?

STEVE: Well my son became a marine and went to Afghanistan for four years. He was fine, but as we know lots of veterans come back and they’re not able to function as well in society as they’d like to. That was the motivation. At the same time, I was involved with Robin Hood which is a New York foundation fighting poverty in the city, and we had set up a veterans housing committee which I ran during my son’s service. We set up a mental health clinic at NYU to help vets in New York City, and I realized I could take it national. Today we’ve opened 25 clinics servicing 20,000 vets and their families every year for free. I was looking for something that was uniquely mine that I could run with. The Cohen Veteran’s Network works to treat PTSD and veterans with traumatic brain injuries in the clinics, and then Cohen Veterans Bioscience works to find cures and treatments on the medical side – developing drugs and diagnostics to treat veterans. They’re really two parts of the same mission.

JORDAN: Well that’s a tremendous story and I thank your son for his service. What do your veteran networks do that the government falls short at?

STEVE: Well the problem is the Veterans Health Administration is bureaucratic. The VHA is just not set up to treat veterans in the way that nets the best results. What we tried to do is be the gold standard for treatment with success, which then forces the VHA to improve their results. Frankly, government isn’t always great at delivering certain types of services that might be better off in the charity or business world. That’s just the nature of our society. I thought it was important to set an example for how to treat those who serve our nation.

JORDAN: Have you evolved those networks to deal with COVID-19?

STEVE: No, these are purely for mental health. You’ve got to stay focused on the mission, and I can’t solve every problem.

JORDAN: Well clearly you’ve had great results and you guys are doing amazing work. The Steve and Alexandra Cohen Foundation has given away hundreds of millions of dollars to a wide range of causes, the two main ones being Lyme disease research and children’s health research. For Lyme specifically, I was wondering what was the gestation of that focus?

STEVE: Pretty simple, my wife developed Lyme disease and it was a really bad case. It took her a long time to get it under control, and navigating the health system was really difficult. I developed Lyme about two years ago, and around the New York area it’s petty bad. Government doesn’t recognize it as a real disease, and the reality is people are suffering from it. She decided to set up a mission to treat Lyme disease, and bring together the best thought leaders to standardize the care. Most people who have Lyme are literally going from doctor to doctor trying to figure out how to treat this. Usually you can fight it with antibiotics, but if you don’t catch it in time it can invade your nervous system and develop all sorts of problems. A lot of the time it gets misdiagnosed as MS, and so there’s a whole problem with the diagnoses in addition to treatment. It’s a very insidious disease – you don’t know you have it until all of a sudden you’re getting weird symptoms. My wife wanted to bring awareness to this problem, and she’s done a great job doing it.

JORDAN: Absolutely. In general I think it’s really admirable how you’ve taken your personal experiences and done real work for the broader communities that share them. We’ve seen this new trend, especially within the last decade, of corporations increasingly involving themselves in a myriad of cultural and political issues. To what extent do you think this is a healthy or unhealthy course of action for businesses to take?

STEVE: Businesses have changed their philosophy of what’s important. Instead of just driving shareholder returns, they’ve realized that they’re part of the world and must contribute on a social basis. They can’t just focus on profitability – they have a responsibility to be forward thinking with what’s going on in the world. It’s a change in tact, a social conscious, and the right approach. You can’t be in the world and decide to be independent of the issues affecting the world. Employees are demanding it, shareholders are demanding it, all stakeholders are demanding it, and so the businesses are being more conscious of the things they’re involved in. Employees care about the world, and if they feel like management is not thinking about the things that matter to them, that’s going to cause a bit of a rift. I think it’s in the corporation’s best interests to address these issues, and over the long term I think it’s a good thing.

JORDAN: I know Point72 takes that stuff very seriously – ESG is a huge part of your system.

STEVE: Yeah whether it’s diversity or the environment, these are big issues that affect everybody and to ignore them just seems narrowly focused.

JORDAN: I wish everyone had that ideology!

STEVE: Well I think corporations are changing and will continue to change. That’s what any system has to do – it has to be adaptable and flexible. It cannot be so inflexible that it doesn’t react to what’s going on in the world.

JORDAN: In the past few months you’ve taken on a big responsibility with the Mets. Everyone who loves the Mets is really excited about it. Have you been a lifelong fan of the Mets and of baseball in general?

STEVE: I was a big Mets and Yankees fan – I was a New York City fan. Growing up it was easy for me to get to Shay Stadium. I’d take the train with my buddies and buy cheap tickets and later in the game we’d try to move to better seats when fans were leaving. We had a fantastic time but when they started, the Mets were sort of laughable, they were terrible. Then in ’69 and ’73 we won the World Series – that was when I was growing up – which was really fun to watch. Then the Mets fell off and every once in a while they’d show up but it’s hard to follow a team that’s not playing well. It was more fun to follow the Yankees, but I’ve always been a Mets fan at heart. Now that I own the team, I’m all in. I view this as a civic responsibility where I can make millions of people happy. My wife’s family are also huge Mets fans. My father-in-law never misses a game, sits front row every time, and gets called “Grandpa” by everyone at Citi Field. It’s exciting, it’s a challenge, there’s a lot to do. I’ve got to redo the organization and it’s going to take time. Hopefully fans are patient but it’s clear that they’re not – they want things done yesterday. Unfortunately, it’s going to take years to fix this. I’m up to the challenge though!

JORDAN: Did you ever think you’d own the Mets? Was that an aspiration of yours as a kid?

STEVE: No, I mean I never thought about it in that way. I tried to buy the Dodgers 10 years ago but I came in second. That’s when I started thinking owning a team might be fun to do. After that I put in a small amount for the Mets, and assumed that it would never come my way. Lo and behold it went for sale, and once I decide to do something I do my best to win it. That’s what happened here. This is a new challenge, new excitement. I get to bring my skills from operating my business and my enthusiasm over and we’re having fun with it.

JORDAN: It’s a really exciting thing but COVID makes running a sports team especially difficult. Did the onset of the pandemic give you any pause when evaluating the team or the purchase?

STEVE: Well actually it gave me a chance to buy them cheaper. My first bid was higher than what I ended up paying, and I view this as a long term investment. COVID will pass with the vaccines coming out very shortly, and I’m looking to stay involved with the Mets for 20-30 years.

JORDAN: You’ve brought up the importance of adaptability a lot, and I think that’s really pertinent to baseball. There have been lot of discussions within the baseball world about its declining popularity, and how we can bring the sport back – getting younger kids into watching and playing baseball. Have you been involved in any of those discussions, either on specific things or just more general ideas?

STEVE: It’s a good question. Baseball is steeped in tradition, and you don’t want to get rid of that, but the world is different today. Three-plus hour games are too long, and the attention span of people given all the different ways they can spend their time is just different. People are on social media, they’re watching short-form clips; we have to deliver baseball in a way that excites our young future fans. I think there’s a rabid fan base for the Mets, and what I need to do is create an experience that is more than just baseball. The park should become a destination where they can have multiple experiences. Sitting in your seat for three hours is no fun – people want to do other things and watch the game. We need to make it more of a party. I’m actively looking at how to redo the stadium to create more experiences around the park. That’s a longer term project though, right now I need to focus on getting a better team on the field. On top of that, we need to find ways to connect with younger fans with different types of content. We’re currently talking to a major network about doing a documentary on the 2020 Mets – we’re trying to tap into younger culture in ways that are unique and different. I’ll call that TBD but we’re looking at lots of stuff that hopefully engages the fans.

JORDAN: That’s all really exciting. I’m ready to see what you have coming! You said it yourself – the world is very different now, even from the beginning of last year. As we exit this era of hyper-caution how are you prepared to convince people to come back to Citi Field, back into stadiums watching the game surrounded by thousands of people?

STEVE: There are certain things I can’t control. The government will determine how many fans we can have, but at some point people will be vaccinated (assuming the virus doesn’t mutate) and then people will be protected. Frankly I think there is a pent-up demand for people to get out of the house and enjoy themselves. I think people are raring to go and will want to come to the stadium once they feel safe. Obviously we’re going to employ procedures to make things more contact-free (mobile ordering and ticketing etc). Ultimately, people have to be vaccinated in order for them to be comfortable getting back to normal life.

JORDAN: Well President Biden is saying we can get 100 million does in 100 days so hopefully that pans out.

STEVE: Actually I don’t think that’s a high enough goal. New York City residents can vaccinate at Citi Field, and we can do 7,000 people a day, 24/7.

JORDAN: That’s amazing! So you think there’s going to be a spike in interest level and engagement?

STEVE: Like I said, they’re raring to go. People have been indoors and held back, and they’re going to be much more appreciative of these experiences and being around people again. The Mets are going to benefit from that.

JORDAN: Well that’s great and kudos to you on the Citi Field vaccinations, those stats are really incredible. We’ve seen (especially with the pandemic, high rates of crime, high taxes, and spikes in homelessness) a mass exodus of New Yorkers into non-metropolitan areas. Are you worried about the future of the active Mets fan base?

STEVE: I think our biggest fan base is Long Island, so I’m less worried about that. I think these are statewide issues, so if they’re going to lose population based on people’s views, then ultimately things are going to change. People are also much more mobile. We’ve learned from the pandemic that I can operate my entire firm from home. Outside of a small technology staff, no one is on the office. There’s a level of freedom that didn’t exist before, which means that you can live anywhere and do your work. That’s a new thing. It’ll take awhile for states to realize they have to compete on a different level. Once people start moving to lower taxed areas and improving their quality of life, states are going to realize that they’re losing revenue, and they’ll have to deal with that. That’s the nature of competition. Like anything else, these are adaptive organisms, and they’ll adapt. If they don’t, they’ll run into problems and then they’ll have to adapt. These things solve themselves over time. I’m not shorting New York City – it’s a vibrant place with lots of reasons for people to live there. It will have to adapt, like any city or country that has to deal with new issues.

JORDAN: You mentioned the newfound ability to work online. You’ve lived through this period of stay-at-home work and found that it’s gone rather well. Do you expect that once we’re out of the pandemic, Point72 implements a hybrid model?

STEVE: I don’t see why not. As long as people are still doing their work and want to be competitive. People may need flexibility, and they may even be more productive without the long commutes so I’m open to that. Maybe some hybrid model with two days off and three days on, or one week off one week on, we’ll have to play with it and see what works. We hire the best and brightest, so we’re going to have to be flexible with how we work. I’m open to that because I’ve seen it work – we’re living proof. In fact, I don’t think I’ll be in the office 5 days a week anymore. I can operate from home. Maybe I’ll stay home Fridays, or go to the Mets offices instead of Point72. I’d love that kind of flexibility.

JORDAN: Do you think other firms are thinking about it the same way you are, and if so, if expectations shift in such a major way from firms, could we see this exodus continue? Could more people leave if they’re unburdened by having to work in person?

STEVE: It’s certainly something that has to be monitored. The real question is: where do they want to work, and where do they want to live? One isn’t exclusive from the other. At the same time, people want to interact with their colleagues. There’s going to be this happy blend, and however that plays out it’s our job as a company to provide as much flexibility as possible to operate at a high standard. It’s hard to know how that will affect New York. It can’t be a positive, it can only be a negative in the long run. The other side is because of that, the city will have to adapt and find ways to attract workers. Nothing is static, one reaction causes another and that’s why I’m not as negative on New York City.

JORDAN: Well not being negative is always good. In part due to people like you, we’ve seen a steady increase in the interest people have in the finance world. A lot of my friends regularly trade stocks, even as high school sophomores and juniors. People are really excited about the markets because they can pursue their interests in a way that actually makes them money. Is there advice you have for kids my age who want to pursue the field you essentially pioneered?

STEVE: Obviously if they’re really interested in it they ought to get a great education, and then go from there. They have to learn the basics of the businesses and finance industries they want to be in. You mentioned they’re making money, they’re not always going to. Stocks don’t just go up. We’ve seen an ease of access in trading with Robinhood and other companies like that that have made it easy with an app to get involved with the markets. You’re trading against professionals, who have better experience and better access to information than you. Regardless, I wish I had that as a kid. If I did, I wouldn’t have left my room. I would’ve traded all day and all night. I can only imagine what’s going on with your friends. Anything that gets people interested in the economy and capitalism is a good thing. Ultimately, that’s what’s driven the American economy for the past 200 years, and given all the stuff we hear about alternative ways of running an economic system, I’m encouraged by what you’ve said.

JORDAN: That’s awesome. Before we wrap up, is there anything you want to say?

STEVE: I’d say follow your passion. It’s not all about money – success comes from being passionate about something and doing it to the best of your ability. That’s what I tell my kids – as long as you’re happy and following the things that make you happy, then go for it. Go after it with 100% of your energy and your ability.

JORDAN: That’s a lovely way to close this out. Thank you so much for being here.

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