Englander’s Millennium Is Returning $8 Billion to Investors

(Bloomberg) -- Izzy Englander’s Millennium Management plans to return $8 billion to investors at year-end as part of its effort to create a more stable capital base.

The money will come from a share class that can be redeemed in full after a year, people with knowledge of the matter said. The firm’s shorter-term capital accounts for about 70% of its $47 billion in assets under management.

At the same time, Millennium is raising as much as $6 billion for a new longer-term share class. The cap for fundraising, which ends Jan. 1, previously had been $4.5 billion, according to the people.

The firm has been exploring ways to lock up capital for longer over the past decade, and it moved to increase the period over which clients can redeem their money two years ago. Millennium’s flagship hedge fund climbed 16% this year through October, the people said. Its steady returns over a three-decade history make the new structure an easier sell.

A spokesman for the New York-based firm declined to comment.

Under the newest share class, Millennium has three years to call the pledged capital from investors. Once that happens, clients will be able to withdraw only 5% of their money each quarter, meaning it would take them five years to cash out completely.

Millennium started a 5%-a-quarter share class in 2018 that didn’t include the three-year window for capital calls. That class now accounts for about $8.5 billion.

To get investors to switch to that vehicle, Englander has returned profits from the older share class for the past two years. Investors who have money returned can choose to reinvest it in the longer-term structure.

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