Multi-strategy major Millennium Management has allocated hundreds of millions of dollars to Hong Kong-based Centerline Investment Management in a strategic partnership aimed at bolstering returns, according to a report by Bloomberg.
The move reflects a broader trend of multi-strategy hedge funds using external managers to enhance performance amid rapid asset expansion.
The report cites unnamed sources familiar with the matter as confirming that under the agreement, Centerline will manage a separate account on behalf of Millennium. Representatives from both Millennium and Centerline declined to comment on the arrangement.
Millennium, led by Izzy Englander, has grown to nearly $70bn in assets, making it the largest of over 50 multi-strategy hedge funds globally. Since 2017, the multi-strategy sector has collectively increased its assets by more than $230bn, while the broader hedge fund industry has stagnated, according to reports from Goldman Sachs.
Despite their growth, these firms have faced mounting pressure to deliver strong returns with some, including Millennium, Balyasny Asset Management, Verition Fund Management, Point72 Asset Management, and Schonfeld Strategic Advisors, turning to external managers to supplement their internal teams.
Centerline Investment Management, founded by Ben Xu in 2018, specialises in a market-neutral equity strategy focused on Greater China. The firm uses alternative data to identify pairs of long and short trades based on company fundamentals. Prior to the Millennium deal, Centerline managed around $200 million in assets.
According to one of Bloomberg’s sources, Centerline has delivered an annualised return of 7.5% since its inception, significantly outperforming the MSCI China Index, which recorded a 2% loss over the same period.
