More than a month after Quantopian announced it would start managing outside investors' money, it was announced on Wednesday that hedge fund magnate Steven Cohen is giving the Boston fintech startup up to $250 million to manage in a new hedge fund, The Wall Street Journal reported. Cohen is also investing an undisclosed amount of money in the startup.
Quantopian is a crowdsourced hedge fund that allows anyone with a knack for coding and finance to create and test new stock trading systems using the startup's own software tools. Select authors can choose to license their algorithms and get paid based on performance. The startup also runs a series of contests that have provided awards ranging from $5,000 to $100,000 for people who create the best algorithms.
John Fawcett, Quantopian's CEO, told The Wall Street Journal that Cohen's commitment to the new hedge fund will let the startup increase its investing and dedicate more to each algorithm. The $250 million won't be fully deployed at once and will instead add money incrementally as Quantopian meets certain performance metrics.
Quantopian has 85,000 users across 180 countries, according to the newspaper. Those users have created over 400,000 algorithms for its website, but only 10 have been selected so far to trade a few hundred thousand dollars for Quantopian.
Cohen previously ran SAC Capital Advisors, which pled guilt to insider trading violations in 2013 and shut down. Cohen was never criminally charged, but earlier this year he reached a settlement with the U.S. Securities Exchange Commission over a civil charge that had him agree to not manage other peoples' money for two years.
