Hedge Fund Holocene Triples Assets Yet Still Turns Away Money
(Bloomberg) -- Brandon Haley’s hedge fund has tripled assets to $5.3 billion in 2 1/2 years -- with more money at the ready.
Holocene Advisors has a wait-list of eager investors but to keep growth manageable it’s only periodically taking in limited amounts of money from certain clients and turning others away, according to people with knowledge of the matter.
The firm, started in April 2017 by Citadel’s former equity chief with $1.5 billion in commitments, is bucking an industry trend, gathering assets even as hedge funds broadly are being plagued by redemptions. Clients pulled about $88 billion from funds in the first 10 months of this year, more than twice as much as in 2018, according to data provider eVestment.
Read more about Holocene’s 2017 launch here
Investors have been impressed with Holocene’s 14% return this year through October, compared with 5.3% for the average hedge fund, said the people, asking not to be identified because the information isn’t public. Last year, the fund rose about 3% while funds overall were down slightly, and in 2017 it gained about 9%.
Julia Dailey, chief operating officer of the New York-based firm, declined to comment.
When Haley started Holocene it was among the year’s biggest and most-anticipated launches, and it’s steadily grown each year since then. Taking in too much money at once can hinder a fund’s returns, so some managers opt to accept smaller portions of capital over time, putting cash to work before receiving more.
Haley’s stock-focused firm has managed to mostly stay out of the limelight since its launch. The fund trades a beta-neutral strategy, meaning its bets on rising shares will be matched by wagers on those it expects to fall. It has six teams each focusing on separate sectors: consumer, industrial, health-care, financial, energy and TMT, or technology, media and telecommunications.
Haley left billionaire Ken Griffin’s Citadel in early 2015 after nine years at the hedge fund giant. When he started Holocene he scored Goldman Sachs Asset Management and BlackRock Inc. as early backers, each investing $200 million.
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