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The world’s hottest hedge fund says banking juniors aren’t adequately trained

Jonathan Jones knows a thing or two about investment banks’ analyst programmes. Between 2003 and 2012 he occupied a range of recruiting roles for Goldman Sachs, including the global head of recruitment for the investment banking division. Nowadays, Jones is the head of investment talent development for Point72, the family office of hedge fund manager Steve Cohen: he's the man to talk to if you want to work with Cohen as a portfolio manager. Jones says Point72 hires juniors from banks, but they always need additional training.

“Our own Point72 Academy Program for training graduates is substantive and rigorous,” says Jones. “The whole thing lasts for 10 months." By comparison, he says most investment bank training programmes last only six weeks.

“We take graduates further, faster and deeper than any investment banking training programme,” says Jones. And he cites data to substantiate this: “When we look at investment banking analysts for lateral hiring opportunities we set them a modelling test – their average score is 86%. When we set the same modelling test for candidates who’ve been through our Academy programme, they score 96% and complete it in half the time.”

If you’re a banking junior hoping Cohen might hire you on the basis of your modelling prowess, this will clearly come as a disappointment. All the more so, because Point72, which paid an average of $251k (£178k) to non-partner level employees in London in 2016, seems to be fast expanding. Financial News reported earlier this week that the fund has doubled its office space in London’s St. James's Square. Will Tovey, the head of Point72’s London office, said this week that the fund has already amassed 60 people in London – exceeding its initial aim of 50 by the end of this year, with more hires to come.

“The main driver for our hiring is the availability of talent,” says Jones, suggesting that if Point72 finds the right calibre of candidates, it will always recruit them. The suspicion, too, is that the fund is adding space and staff in anticipation of taking outside money in the near future: Cohen's ban on outside capital expired on 1 January and Point72 now incorporates Stamford Harbor, the new fund founded by Cohen with an alleged target of raising up to $11bn in outside capital.  Jones politely declined to comment.

Handily, however, for any banking juniors hoping to join Cohen’s expansionary empire, a stint on an analyst or associate programme is no barrier to working for Point72. The fund launched ‘Academy 2.0’ early last year, with precisely the intention of poaching juniors from banks and bringing them up to speed. Anyone with a banking background can join: recruits are typically former analysts and associates, although one existing Academy 2.0 hire spent five whole years trading derivatives with a bank before being re-educated.

“In Academy 2.0, we take the foundational skills candidates have gained in banks and make them richer and deeper,” says Jones. Knowledge gaps are also filled: juniors from banks may have little idea about company coverage; often they can’t code. Point72 teaches them how to do both.

So far, Point72 has hired only five people to Academy 2.0, although a new class will start this April (for which applications are now being solicited). “One of our hallmarks is the high level of personal attention and investment people receive from the Academy training team,” says Jones. “We don’t want the classes to be too large.”

The juniors who join seem to agree. While investment banks spend their time losing juniors to a legion of predators (Point72 now included), members of Point72’s Academy seem to stick around. – Out of a total of around 20 people who’ve been through the Academy so far, only two have left and this was only because the portfolio managers they worked with were launching their own funds.

“They left with our blessing,” says Jones. “…We want to create the greatest opportunities for the industry’s greatest talent. This has been our continuum.” Investment banks have been warned.

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AUTHORSarah Butcher Global Editor

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