U.S. Markets

Citadel, Point72 to invest $2.75 billion in hedge fund Melvin Capital

FILE PHOTO: Ken Griffin, Founder and CEO, Citadel, speaks during the Milken Institute's 22nd annual Global Conference in Beverly Hills, California, U.S., April 30, 2019. REUTERS/Mike Blake/File Photo

(Reuters) - Melvin Capital Management said on Monday it would receive an investment of $2.75 billion from Citadel, the Chicago-based hedge fund led by Ken Griffin, and billionaire investor Steven A. Cohen’s Point72 Asset Management.

The infusion is expected to help stabilize the hedge fund, which has been hard hit by a series of short bets this year, the Wall Street Journal reported earlier in the day, citing people familiar with the firm.

The investment includes $2 billion from Citadel and its partners and $750 million from Point72, with both taking a non-controlling revenue share in Melvin, it said.

Melvin Capital was founded in 2014 by Gabriel Plotkin, the firm’s chief investment officer.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Sriraj Kalluvila