Steve Cohen taps crowdsourced investment algos to manage up to $250m

Steve Cohen taps crowdsourced investment algos to manage up to $250m

Billionaire Steve Cohen is pumping up to $250 million into a new fund managed by Quantopian that crowdsources investment algorithms from its online community of amateurs.

Cohen is also making an undisclosed investment in Quantopian through his VC arm Point72 Venture.

Quantopian's free platform boasts 85,000 members from 180 countries bidding to create institutional-quality investment algorithms. The firm says that members - including professors, research scientists and developers - have written some 400,000 algorithms from which it selects the best for its portfolio.

The algos will be used to manage the funds from Cohen - some of which is contingent on hitting performance metrics - with the authors receiving a royalty based on how his or her strategy does.

Matthew Granade, leader of Point72 Ventures, says: "The scarce resource in quantitative investing is talent. Quantopian has demonstrated an innovative approach to finding that talent."

John Fawcett, CEO, Quantopian, adds: "This is a watershed moment for the entire industry. Steve Cohen, one of the most storied and successful investors, will be supporting investment algorithms produced by Quantopian’s community."

Cohen's hedge fund, SAC Capital Advisors, was shut down after pleading guilty to insider-trading charges in 2013. Cohen himself reached a settlement with regulators in January 2016 that prevents him from managing money for outside investors until 2018.

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