Hedge fund Millennium Management posted a 1.3% loss in February, marking its worst monthly performance in over six years, with the rare setback being driven by around $900m in losses across two investment teams, according to a report by the Wall Street Journal.
The report cites unnamed sources familiar with the matter as revealing the uncharacteristic loss at the firm, which is known for its disciplined risk management.
Millennium, which manages $75bn across more than 340 semi-autonomous investment teams, has a long history of delivering steady, non-correlated returns, and has experienced only one down year since its founding by Israel “Izzy” Englander in 1989, Millennium hadn’t posted a monthly decline of more than 1% since late 2018.
The February drawdown comes amid choppy market conditions, with volatility fuelled by concerns over slowing economic growth and uncertainty surrounding President Trump’s tariff policies. The broader hedge fund industry struggled as well, with HFR’s composite index down 0.47% for the month, and only half of tracked hedge funds posting gains — a sharp decline from nearly 80% in January.
The bulk of Millennium’s February losses stemmed from index-rebalancing trades, a strategy that has historically delivered billions in gains for the firm. Portfolio managers Glen Scheinberg and Pratik Madhvani, two of Millennium’s top-performing traders, each saw hundreds of millions in losses as bets on which stocks would be added to and removed from market indexes went awry.
Despite its scale, Millennium is known for stringent risk controls. According to previous reports, teams can have their buying power cut in half if losses hit 5%, while a 7.5% drawdown can result in portfolio managers being dismissed, though exceptions can be made.
