October 17, 2021

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Millennium Shuts Some Trading Pods in Latest Sign of Upheaval

(Bloomberg) — Millennium Management has closed several of its “pods” run by teams of traders, the latest sign of hedge funds struggling to deal with the impact of this month’s market meltdown.

Around 10 teams of traders are affected, according to a person familiar with the matter. An array of firms including those run Ray Dalio and Stephen Cohen have reported losses this year. Malachite Capital Management, a firm that oversees about $600 million, said it plans to wind down.

The economic impact of the virus has caused market swings not seen in decades and rocked the hedge fund industry as it was already struggling to curb client defections and boost returns. Losses at funds have ranged from single digits to more than 20%.

Millennium lost 2.7% this month through March 12 and was down 1.9% for the year, according to investors, Bloomberg reported. The March drop is rare for Izzy Englander’s $40 billion multi-strategy hedge fund, where declines of even a few percent in a month almost never happen. Millennium is far from the only fund hurting.

A spokesman for Millennium declined to comment on changes to the firm’s trading teams. The news was earlier reported by the Financial Times.

Dalio’s Pure Alpha Fund II has declined 21% this year, according to a client letter seen by Bloomberg on Wednesday, a return that Dalio said isn’t a surprise.

“Don’t hold us to exactly these numbers because there’s nothing exact about them in this volatile environment,” Dalio wrote in the letter. “While it’s not what I would want, it’s consistent with what I would have expected under the circumstances.”

Cohen’s Point72 Asset Management slumped about 4% this year through Monday. Cohen’s $16 billion firm, which invests primarily in stocks, had seen slight gains in January and February, but gave back those winnings and more as stocks plunged, according to people with knowledge of the performance.

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