Millennium also doesn’t consist of one team; Englander works with more than 320 teams, allocating money that the team invests.
The catch? A team that loses 5% of its capital has its capital from Millennium cut in half. A manager who loses 7.5% of their allocation winds up losing his or her job. (The approach may go a long way toward explaining Millennium’s high employee turnover, reputed to be between 10% and 15% annually.)
As an example of its omnivorous approach to investment styles, the fund spun off part of its firm to create the quantitative investment management firm World Quant in 2007. The spinoff, which focuses on statistical arbitrage, now manages about 15% of Millennium’s assets. It’s a leader in using data mining and artificial intelligence (AI) to run more than 4 million types of predictive code known as “alphas,” which provide data on everything from credit card use to parking lot traffic.
Although Englander and firm members own about $10 billion of the fund, the company is also expanding its reach beyond its usual customers, who have traditionally included sovereign wealth funds, endowments, and institutional investors. A Goldman Sachs-designed special purpose vehicle began offering equity stakes of 10% to 15% in Millennium to high-net-worth individuals for a 3% management and 30% carry fee on a minimum investment of $1 million with a five-year lockup period.
Notable successes
Not many hedge funds have survived more than 35 years of ups and downs. Millennium has thrived more than most, becoming one of the most successful hedge funds in the world.
Founded with only $35 million in capital, Millennium has grown to become one of the largest hedge funds in the world, with 6,300 employees in almost 150 locations, responsible for more than 13 million trades every day.
