Multi-strategy hedge fund major Millennium Management is exploring the launch of its first new fund since the company launched over three decades ago, to focus on investments in less liquid assets including private credit, according to a report by the Financial Times.
The report cites unnamed sources familiar with the matter as revealing that Millennium sees untapped potential in the private credit sector, which has grown rapidly into a nearly $2bn asset class as traditional banks have scaled back on core lending activities, and other less liquid markets, although it has yet to make a final decision on whether or not to launch the new fund.
Millennium, which now has around $69.5bn in assets, currently operates one flagship fund, managed by over 330 investment teams with strict risk controls. It trades in fundamental equity, equity arbitrage, fixed income, commodities, and quantitative strategies within liquid markets, and has seen a 9.5% gain in the first nine months of the year. Since inception, it has averaged 14% annual returns.
The firm competes with other multi-manager giants like Ken Griffin’s Citadel and Steve Cohen’s Point72, typically distributing capital across multiple teams and trading strategies. According to insiders, having recently raised an additional $10bn in deployable assets, it has yet to decide whether to raise new capital for a standalone fund or to reallocate from its existing capital pool.
With a significant portion of its flagship fund in a long-term share class requiring a five-year exit period, Millennium’s redemption horizon aligns more closely with private equity and credit funds than with most hedge funds, which typically offer shorter exit timelines.
Other hedge funds have already ventured into the private credit space, including Man Group, the world’s largest publicly traded hedge fund, which acquired US-based private credit firm Varagon last year.
