Gelband Hedge Fund Is Said to Make Under 1% After Biggest Launch

(Bloomberg) -- Michael Gelband last year raised the most money ever for a hedge fund launch. But he barely turned a profit for his investors.

His ExodusPoint Capital Management, which raised $8 billion and started trading in June, made about 0.6 percent in its first seven months, according to people with knowledge of the returns. A spokesman for the New York-based hedge fund declined to comment.

Gelband, the former bond chief at Millennium Management, had kicked off one of the most anticipated hedge fund launches in the industry, attracting investments from the likes of BlackRock Inc. and Goldman Sachs Asset Management. The firm hired scores of money managers to trade across markets.

Industry performance was mixed in a year when managers were challenged by wild price swings in February and the fourth quarter. Alan Howard and Crispin Odey outperformed after years of underperformance, while David Einhorn and Dan Loeb posted double-digit losses. And even as many managers shuttered their hedge funds last year, the pace of closures was the slowest since 2007.

Gelband was viewed as a successor to Millennium’s billionaire founder Izzy Englander, only to leave two years ago after they disagreed about Gelband’s future role at the hedge fund. The pair fell out again as Gelband sought to start a rival business and hire former colleagues. They later resolved their dispute in arbitration.

Separately, ExodusPoint and one of its employees was sued in October by Schonfeld Strategic Advisors, which sought to bar them from using confidential information to solicit and hire its staff. ExodusPoint has denied the allegations.

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