(Bloomberg) — Point72 Asset Management, the firm that manages the fortune of billionaire trader Steven A. Cohen, started a venture capital unit that backs technology companies.
The business, Honeycomb Ventures, will invest mainly in growth equity opportunities and is led by Point72 money manager David Fiszel, 42, the firm wrote today in a memo to employees, a copy of which was obtained by Bloomberg News.
Honeycomb will invest in global media, technology and telecommunication companies, including those that focus on cloud computing, payments and security technology and e-commerce, according to Point72 spokesman Mark Herr. The unit operates as a passive investor that holds stakes for between five and 10 years, he said in a telephone interview.
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Point72 is joining firms such as Coatue Management and Tiger Global Management in backing startups as valuations soar to levels not seen since before the dot-com crash. Hedge funds and mutual funds that once shunned venture-style deals are paying 15 to 18 times projected sales for the year ahead in recent private-funding rounds, three people with knowledge of the matter have said.
Mutual-fund and hedge funds took part in at least 37 pre-initial public offering funding rounds totaling $5.55 billion from 2012 to 2014, according to Pacific Crest Securities, a Portland, Oregon-based technology investment bank and IPO underwriter.
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Honeycomb is leading a second round of financing for a wine app called Delectable, which instantly recognizes any wine from a photo and allows users to get opinions, see what friends are drinking, buy wine and keep track of their favorite drinks, according to the Point72 memo.
Point 72 oversees $11 billion and is the successor firm to Cohen’s hedge fund, SAC Capital Advisors, which pleaded guilty to securities fraud in 2013 as part of a record $1.8 billion settlement with U.S. prosecutors. The firm is based in Stamford, Connecticut.
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Fiszel is one of Point72’s top-peforming money managers and first started working for SAC in 2000, when he invested on technology, media and telecommunication companies, according to a biography provided by Point72. He left four years later and was a founding managing partner of hedge fund manager Rhombus Capital Management. Fiszel returned to SAC in 2008 as a money manager and has done venture capital investing since 2011, the biography said.
He had previously worked as an analyst at New York hedge fund, Omega Advisors, and Lehman Brothers Holding Inc., according to the biography.
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