Steven Cohen, the founder of Point72 Asset Management, warned investors to be cautious about the current market environment. The fund manager suggested that the markets haven’t fully recovered from lows fueled by the coronavirus.

“Markets don’t come back in a straight line; after an earthquake there are tremors,” Cohen wrote in a memo to his employees last week. Reuters first reported on the memo.

Steven Cohen on the Coronavirus Market

Cohen said in the memo that Point72’s returns been “essentially flat for the year.” He praised his firm’s risk management in “such a challenging environment.”

Last year, Point72 returned 14.9% from its main fund. That return helped amass Cohen an estimated $1.9 billion in income.

The news comes as Cohen is moving to create a new venture/private equity hybrid called Point72 Hyperscale. The new fund will back early-stage tech companies that specialize in artificial intelligence. The new fund will raise between $500 million and $900 million this year. Cohen will act as the anchor investor.

According to the Wall Street Journal, the firm will take stakes in companies that produce revenue between $10 million and $200 million per year. The idea behind the new project was first tested at Point72 Ventures, a spinoff of the hedge fund. That private market unit launched in 2016 and has a portfolio of more than 50 companies.

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