A hedge fund within US investment firm Tudor is planning to launch as an independent firm with $9bn in investor assets, in what is thought to be the biggest so-called spinout in the sector's history. Quant-focused hedge fund Xantium, which employs around 300 people, is set to formally leave the company controlled by billionaire Paul Tudor Jones II in the first half of next year, according to people familiar with the matter. It will set up independently with capital from its parent firm, though it is not clear whether Tudor will hold an equity stake. Xantium and Tudor declined to comment.
Most of Xantium's $9bn in capital is external money, with the rest made up of investments from Tudor, Xantium's leadership and some of its employees. The largest hedge fund spinout to date is thought to be Leda Braga's quant fund Systematica, which separated from Michael Platt's Blue Crest in 2015 with $8.4bn in assets. Data shared with the FT by specialist providers suggests Xantium will become the biggest hedge fund spinout to date, if it goes according to plan.
Xantium was founded within Tudor in 2019 by Oliver Watson and Sergey Levin, formerly senior quants at DE Shaw. The pair specialised in computer-driven trading strategies that use data and mathematical models to predict equity market movements. The fund blends quantitative trading with human-led trading, although the majority of the risk is taken by computers. It invests across equities, commodities, bonds and foreign exchange, and has offices in London, New York, Salt Lake City and Abu Dhabi.
The launch comes at a difficult time for hedge fund debuts. Operational and legal costs to set up an independent fund have risen, while multi-manager giants including Millennium and Citadel have offered large sums to top portfolio managers. Executives say a new manager now needs to raise hundreds of millions of dollars before launch. Tudor has a long history of backing new hedge funds, most notably Two Sigma, now one of the world's largest.
Source: Financial Times Companies · Summarized by HeadlinesBriefing