Izzy Englander’s Millennium Management has decided to stick to its original $10bn fundraising goal for new hedge fund capital, despite attracting twice that level of investor interest, according to a report by Bloomberg.
The report cites unnamed sources familiar with the fundraising plan as confirming that the $69.5bn hedge fund will adhere to the $10bn cap.
Millennium, known for its steady performance through its multi-manager, multi-strategy investing approach, has become increasingly popular among investors seeking consistent returns, regardless of market conditions. Since its founding in 1989, the hedge fund has only had one losing year, in 2008, when it dropped about 3% amid the global financial crisis. This year, Millennium has posted a 9.5% gain through September.
In this latest fundraising round, clients pledged capital that Millennium can tap into over time. As the firm deploys funds, it will replenish its capital pool with fresh commitments. Those who committed early will have priority in the capital drawdowns. The firm is expected to begin tapping into the new capital as early as January.
This fundraising approach gives Millennium more flexibility, allowing it to access liquidity when needed without holding excess cash, which could drag on returns. Additionally, the new commitments come with more certainty, as they will no longer expire after three years, though investors can gradually reduce their pledges after two years.
Having more stable capital is crucial for Millennium and its peers as they compete for top investment talent. Millennium’s investors can withdraw only 5% of their capital each quarter, meaning full redemption can take up to five years.
In contrast, some of Millennium’s largest competitors, such as Ken Griffin’s Citadel and Steve Cohen’s Point72 Asset Management, have opted to slow their growth by returning profits. Citadel routinely returns money to clients, while Point72 is considering a year-end plan to return billions—the first time it has made such a move.