Key Takeaways
- • Melvin Capital Management received a $2.75 billion investment on Monday, January 25, 2021, from Citadel and Point72 Asset Management, according to Reuters.
- • Citadel and its partners contributed $2 billion, while Point72 contributed $750 million.
- • Both investors took non-controlling revenue shares in Melvin Capital rather than equity control.
- • The infusion followed heavy losses at Melvin tied to a series of short bets this year, per the Wall Street Journal, and was intended to stabilize the firm.
- • Melvin was founded in 2014 by Gabriel Plotkin, its chief investment officer.
Summary
Melvin Capital Management said on Monday that it would receive a $2.75 billion investment from Citadel, the Chicago-based hedge fund led by Ken Griffin, and from Point72 Asset Management, the firm led by billionaire investor Steven A. Cohen, according to Reuters.
The investment consists of $2 billion from Citadel and its partners and $750 million from Point72. Both firms will take a non-controlling revenue share in Melvin, the company said. The Wall Street Journal reported earlier the same day, citing people familiar with the firm, that the infusion was expected to help stabilize Melvin, which had been hard hit by a series of short bets during the year.
Melvin Capital was founded in 2014 by Gabriel Plotkin, who serves as the firm's chief investment officer. The transaction positions Citadel and Point72 as the principal backers of a fund that had come under acute financial pressure in early 2021.
The investment consists of $2 billion from Citadel and its partners and $750 million from Point72. Both firms will take a non-controlling revenue share in Melvin, the company said. The Wall Street Journal reported earlier the same day, citing people familiar with the firm, that the infusion was expected to help stabilize Melvin, which had been hard hit by a series of short bets during the year.
Melvin Capital was founded in 2014 by Gabriel Plotkin, who serves as the firm's chief investment officer. The transaction positions Citadel and Point72 as the principal backers of a fund that had come under acute financial pressure in early 2021.
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