Millennium Management, the multi-strategy hedge fund major founded by Izzy Englander, is aiming to raise between $7bn and $10bn in new capital as part of a strategy to secure a more permanent funding structure for the firm, according to a report by Bloomberg.
The hedge fund, which currently manages about $69 billion, is following a growing trend among its peers to lock up client capital for longer periods.
In a shift similar to private equity models, Millennium is raising callable capital rather than collecting it upfront, which is common practice for hedge funds. Under this new approach, investors will pledge funds that Millennium can access over time. When the firm taps into these funds, early investors will contribute more, but the pool will be replenished as new commitments are made.
This fundraising method allows Millennium to maintain liquidity without holding a large cash reserve, which could impact returns. It also offers more certainty in capital management, as client pledges will no longer expire after three years. However, investors will have the option to gradually reduce their commitments after two years.
As well as helping to attract top investment talent, a source of stable, long-term capital mitigates the risk of large-scale withdrawals during market volatility. Millennium already limits withdrawals to 5% per quarter, stretching the full redemption period to five years.
