Millennium Management is redeeming more than $1.5 billion of leveraged cash from two external hedge funds backed last year. Izzy Englander's firm withdrew over $1 billion of leveraged capital from event-driven hedge fund Troluce Capital Advisors. The firm is also pulling $500 million of leveraged capital from Jack Land's Axebrook Capital, which spun out of York Capital Management about five years ago.
Millennium's decision was driven by losses at both firms. Both external funds will continue to invest money, with Troluce recently focusing on trading beyond its main hedge fund. More large firms are farming out billions to external managers to tap fresh talent as their soaring assets grow.
Millennium is one of the most prolific backers of outsiders, with dozens of its more than 370 investment teams external. Such capital has become a major funding source for smaller peers to grow quickly, but multistrategy platforms operate with tight risk limits and have little tolerance for losses, allowing capital to be withdrawn with little notice. Millennium was little changed in September and has gained 8.1% year-to-date.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing