Millennium Management is backing the launch of a new quantitative hedge fund founded by former Citadel researcher Paul Dou, as investor demand for systematic strategies continues to grow, according to a report by Bloomberg.
Hong Kong-based Third Epsilon Ltd., established by Dou following his departure from Citadel in 2024, will initially manage capital exclusively for Millennium. According to people familiar with the matter, the allocation could eventually exceed $1bn.
Dou spent six years at Citadel, where he served as a research lead within the firm’s Global Quantitative Strategies business before leaving to establish his own investment firm.
The investment marks the latest in a series of seed and strategic backing arrangements by Millennium, which has increasingly supported emerging hedge fund managers. Recent examples include commodities-focused Echion Capital, led by former Millennium portfolio manager Chaitanya Mehra, and former Goldman Sachs trader Qin Xiao, who also received a significant capital allocation.
The move comes as hedge fund launches accelerate amid rising institutional demand for alternative investments. Industry assets reached an estimated $5.2tn in the first quarter of 2026, according to Hedge Fund Research, while recent allocator surveys indicate continued appetite for both multi-strategy and quantitative investment strategies.
Millennium is not alone in supporting new systematic managers. Large institutional investors, including Blackstone, have also explored backing start-up quant firms, reflecting growing interest in market-neutral and data-driven investment strategies, particularly in Asian equity markets.
