Millennium Management, one of the world’s biggest hedge fund firms, has unveiled a shake-up of the organisation of its investment operations that will see co-chief investment officer Bobby Jain depart.
Founder Izzy Englander wrote to employees on Tuesday, in a note seen by the Financial Times, saying that the firm, which manages $59bn in assets, will set up a so-called “office of the chief investment officer”, which will include two new co-CIOs and the heads of risk management in the asset classes in which the firm trades.
Former Goldman Sachs head of equity trading Paul Russo, who is Millennium’s global head of equities risk, will become one of the co-CIOs; the second will be announced shortly.
Jain, who joined Millennium more than six years ago when the firm was managing around $30bn, will relinquish the role of co-chief investment officer. Until the middle of next year, he will help the firm shift to the new organisational structure.
The move follows huge growth in assets at the New York-based firm, a so-called multi-manager fund — with 280 teams of traders running money across a wide range of investment strategies.
Such firms have been among the biggest hedge fund winners of recent years, helped by their diversification and their ability to run hefty bets on winning positions while quickly cutting losing positions.
This has meant that, more than many investment firms, they are heavily reliant on having strong risk management operations in order to limit potential trading losses. Millennium came through the market turmoil of spring 2020, when the coronavirus pandemic began to hit markets, to finish the year up around 26 per cent. This year it is up around 10.3 per cent, despite large falls in equity and bond markets.
“Risk management is central to our organisation and investment process, and will be the primary focus of the office of the CIO,” Englander, who is a co-CIO himself as well as being chief executive and chair, wrote in the note.
Last year Millennium created new roles to lead the risk management of the asset classes it trades, hiring Russo, as well as former Goldman partners Jeff Verschleiser as head of credit and mortgage-backed securities risk and Scott Rofey, who is head of rates/macro and commodities risk.
Millennium’s strong returns have meant that it has been able to get clients to commit to longer lock-ups for their cash, giving the firm a longer-term and more stable asset base. Late last year it revealed plans to return about $15bn to investors while also raising billions of dollars in a private equity-style format.
The Englander note also said that chief operating officer Ajay Nagpal will take on the role of president.
Millennium declined to comment.
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