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Millennium Seeks $3 Billion of Private Equity-Style Capital

Nishant Kumar and Bei Hu

(Bloomberg) -- Millennium Management is in talks to raise as much as $3 billion in capital that it can draw on as needed to finance trades.

The fundraising by Izzy Englander’s hedge fund will probably continue through the first half of next year, according to a person with knowledge of the matter. Building up such “callable” capital is a strategy often used by private equity funds.

Investors would be required to commit at least $25 million to Millennium, and would only be allowed to withdraw 5% of their money per quarter, said the person, who asked not to be identified because the information is private.

A representative of New York-based Millennium declined to comment.

Millennium, which manages about $44 billion, is among a cohort of large hedge funds raising capital even as the industry endures an investor exodus. Investors have pulled more than $130 billion since the start of last year, according to data compiled by eVestment.

This latest capital raising is part of Millennium’s drive to lock up investors’ money for longer to give it greater flexibility and avoid a rush of withdrawals when markets are in turmoil. The hedge fund was one of many that struggled in the first three weeks of March as coronavirus lockdowns shut much of the global economy. It has since recovered and was up 9% this year through June 15, the person said.

Millennium last year raised $4.1 billion when it sought new capital for the first time in two years. Earlier this year, it brought in another $3 billion on stringent liquidity terms that limited clients’ quarterly withdrawals to 5% of their investment, meaning it would take them five years to withdraw all their money. The firm has also returned profits to investors over the past two years and asked them to re-invest the payouts on a longer-term basis.

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