Stay informed with free updates
Simply sign up to the Hedge funds myFT Digest — delivered directly to your inbox.
The multi-strategy hedge fund Jain Global plans to return cash to investors after a tough start following its splashy launch.
The eponymous hedge fund founded in 2024 by former Millennium co-chief investment officer Bobby Jain is instead entering into a deal to exclusively manage money for Millennium, according to an internal memo. The hedge fund plans to return investor capital in the third quarter of this year, according to one person familiar with the matter.
“Scale is paramount in this industry,” Jain said on an internal call on Monday morning, according to a person in attendance. “We always knew that, and we took the challenging route out of the gate to get there. Millennium just collapsed the timeline.”
Jain, which currently manages about $6bn, will remain an independent hedge fund under the agreement, according to the memo. Jain and Millennium declined to comment. The move was reported earlier by Bloomberg.
The shift from managing billions of dollars of investor capital to instead handling money only for Millennium shows the immense hurdles to launching a multi-strategy hedge fund today. The most successful firms, such as Citadel and DE Shaw, manage tens of billions of dollars, giving them the advantage of economies of scale.
Jain had initially envisioned building a firm to compete with the likes of Millennium and its other top rivals. Yet starting a sprawling multi-strategy hedge fund is an expensive undertaking that few firms have successfully pulled off in recent years.
Trading across multiple asset classes requires costly cutting-edge infrastructure to support trading and risk controls, while firms must also contend with intense competition for top portfolio managers.
Volatile markets in recent months, with wild swings spurred by the war in Iran, have made the task even more difficult. Jain has made 0.6 per cent so far this year and 3.3 per cent in April through last Friday, according to a person familiar with the figures.
Jain hired more than 200 investment professionals globally over the past two years, choosing to launch with seven different divisions at once instead of getting off the ground gradually.
The launch was ambitious, and also came at a time when new firms across the industry were having difficulty fundraising. That brought its own challenges: while Jain secured investment commitments of $5.3bn, it had a drawdown capital structure, meaning it called capital from investors in stages.
Millennium, which was founded in 1989 and manages more than $84bn, has struck a handful of agreements with external funds over the years. One of the most prominent examples is the computer-driven hedge fund WorldQuant.
In internal communications with employees, Jain framed the deal as a positive development for the firm even as it has struggled to generate market-beating returns.
“It’s about accelerating our trajectory in a period where scale and resourcing will define the winners and losers,” Jain said on the internal call.
