Losses incurred during escalating market volatility in early August prompted Millennium Management, Balyasny Asset Management, and BlueCrest Capital Management to halt the operation of at least six traders and their investment pods, according to a report by Bloomberg.
The report cites unnamed sources familiar with the matter as confirming that the wave of closures coincided with the rapid unwinding of the yen carry trade amid growing concerns over the US economy.
Chiga Murayama, a senior portfolio manager specialising in Japanese government bond trading at BlueCrest, had his pod shut down after incurring losses. Both he and his team member Yosuke Motegi have since departed from their roles.
Ryan Fitzgibbon meanwhile, who managed industrial and energy stocks at Millennium in Houston, left the firm following losses. His Asia-based colleagues, Shao Ying and Zachary Corones, who operated index-rebalancing strategies, also exited.
In addition, Mark Cox, a Hong Kong-based trader at Balyasny Asset Management known as the “equity guy” on his LinkedIn profile, has also departed.
The exits are the result of the stringent risk management approach commonly employed by mult-istrategy hedge funds to mitigate substantial losses. Typically, traders organised into specific teams, or pods, may have their capital partially withdrawn after a 5% loss and be dismissed following a 7% decline.
Although the early August losses were severe, markets have largely rebounded, and many multi-strategy funds are on track to post profits for the month. Schonfeld Strategic Partners’ fund reported a gain of approximately 1% up to 23 August, LMR Multi-Strategy Fund advanced by 0.9%, and Millennium saw a 0.7% increase over the same period.
