HONG KONG (Reuters) - Point72 Asset Management, which manages U.S. billionaire Steve Cohen’s fortune, has signed its first venture capital investment in a financial technology firm as it looks to further tap technology to refine investment decisions and improve returns.
Point72 Ventures, which was launched in March and targets early stage funding for startups, signed a term sheet with the fintech company and expects to unveil the deal in a few weeks, said Matthew Granade, who is the co-head of the venture unit and also chief market intelligence officer at Point72.
Fintech companies raised a record $19.1 billion last year compared with $12.2 billion in 2014, according to a KPMG and CB Insights report in March, with startups entering new areas in financial services and taking on large banks, insurers and payments firms.
Point72 Ventures will make investments of between $250,000 to $2 million each, focusing on technologies and companies doing analysis and mining of data, compliance and trading technology, Granade told Reuters in an interview.
The investments are part of a push by Point72, which manages about $11 billion, to use different types of data and technologies to help its portfolio managers boost returns.
The firm has used troves of data on credit card use and more recently added satellite data, geolocation data and information on app downloads when making investment decisions on stocks.
Most of the data is U.S.-focused, though it has also used credit card data from China, Granade added.
The firm plans to send a team of two to three of its data people to Hong Kong to make “aggressive traction” in using data in its Tokyo, Singapore and Hong Kong offices, which isn’t so widespread now.
“We don’t have how much alpha there is in this. We’re still early in the process, but what we’re finding is that there’s real insight in this material,” Granade said. “Right now it’s most useful in consumer stocks, but I think we’re going to start to see more uses in industrials, energy.”
Editing by Ryan Woo