Millennium Returning at Least $5 Billion to Investors This Year

Izzy Englander’s Millennium Management plans to return at least $5 billion to investors at year-end as part of an 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 familiar with the matter said. The share class represents about $37 billion of the firm’s $45.4 billion in assets.

In a new twist, any additional money raised will now be deemed committed capital, with the firm having three years to call the pledged money from investors, who learned of the change in a letter Wednesday. Once that happens, clients will be able to withdraw only 5% each quarter, meaning it would take five years to cash out completely.

A spokesman for New York-based Millennium declined to comment.

Financial Crisis

Englander’s firm has sought to lock up capital for longer ever since the 2008 financial crisis, when investors in need of cash pulled money, cutting Millennium’s assets in half. Other hedge funds had halted redemptions.

Millennium, which climbed 12% this year through July, has produced steady returns over its three-decade history, making the new structure an easier sell.

Two years ago, the firm started a 5%-a-quarter share class that now accounts for about $8.5 billion of assets.

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

The amount returned this year will include requested redemptions and profits made in 2020. The firm also may accelerate some pending withdrawals. A final determination of just how much clients will receive will be made after Sept. 30, investors were told.

©2020 Bloomberg L.P.

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