Millennium Management, a 35-year-old hedge fund giant, is considering launching its first new fund since its inception. However, it is taking an unconventional approach, targeting a trillion-dollar "blue ocean" market—private credit.
As traditional banks gradually exit this field, the private credit market has rapidly expanded, reaching an astonishing nearly $2 trillion.
Founded by Izzy Englander, Millennium Management manages a staggering $69.5 billion in assets. According to a report by the Financial Times on the 25th, private equity will be the focus of Millennium's new fund. For this hedge fund giant with extensive experience, it is undoubtedly a completely new challenge.
New Trend in Hedge Funds: Private Credit
Millennium Management is renowned for its strict risk control and a vast investment team, boasting over 330 investment teams and a flagship fund.
Unlike most hedge funds, Millennium's flagship fund requires investors to lock up their funds for five years, making it more akin to a private equity fund or credit fund rather than the traditional hedge funds that typically have shorter redemption periods.
With the explosive growth of the private credit market, hedge funds have begun to venture into this area.The world's largest listed hedge fund, Man Group, is a prime example, having successfully entered this market last year through the acquisition of the American private credit company Varagon.
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However, according to the Financial Times, citing sources familiar with the matter, Millennium Fund is still carefully assessing the opportunities in the private credit market, and the final decision on whether to establish a new fund has not yet been made. Millennium Fund has recently raised an additional $10 billion, which can be deployed when opportunities arise.
Millennium declined to comment.
Issuing a new fund would not only attract more investors for Millennium Fund but also effectively diversify investment risks, thereby enhancing overall competitiveness.
The multi-strategy hedge fund race is becoming crowded.
In recent years, competition in the multi-strategy hedge fund industry has become increasingly fierce. As the hottest and most stable hedge funds on Wall Street at present, giants are all making their moves.
This approach allows for the simultaneous use of various strategies for investment, such as stocks, bonds, commodities, foreign exchange, and derivatives. As long as there is money to be made, multi-strategy hedge funds are eager to include them in their investment portfolios.
Fund giants such as Millennium, Citadel, and Point72 are among the best in multi-strategy hedge funds.The Millennium Fund focuses on basic stock trading, stock arbitrage, fixed income, commodities, and quantitative strategies in multi-strategy investment, with a consistently stable investment performance. In the first nine months of this year, the Millennium Fund's return rate reached 9.5%, with an average annual return rate close to 14% since its establishment.
In the past year, the return rates of the three major funds, Millennium Fund, Citadel, and Point72, have all reached 10% or higher levels.