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Millennium Management is considering launching its first fund since it was founded more than three decades ago in a bid to target less liquid assets, including private credit, according to people familiar with the matter.
Private credit, involving loans made to risky companies, has ballooned into an almost $2tn asset class as traditional banks have retreated from what was one of their core lending businesses.
Despite the explosive growth in private credit, Millennium believes there are still opportunities in that market and other less liquid assets, the people said, adding that a final decision on whether to establish a new fund had not been taken.
The potential move comes as Millennium seeks to sustain the growth that has transformed it into a $69.5bn business since it was started by Izzy Englander 35 years ago.
Millennium, which has more than 330 investment teams operating within strict risk controls, at present has just one flagship fund.
It trades fundamental equity, equity arbitrage, fixed income, commodities and quantitative strategies in liquid markets and gained 9.5 per cent in the first nine months of the year, investors said. It has gained about 14 per cent a year since it was started, they added.
Millennium competes with other multi-manager funds such as Ken Griffin’s Citadel and Steve Cohen’s Point72. Multi-manager hedge funds typically allocate capital across tens or hundreds of teams that operate a variety of trading strategies.
According to the people familiar with the matter, Millennium has not decided whether it would raise fresh money for a new standalone fund or shift money from its existing capital base. Millennium recently raised an additional $10bn in assets that it can deploy when opportunities arise.
Millennium declined to comment.
The bulk of the money in Millennium’s flagship fund is in a long-term share class, which means it takes investors five years to fully exit. A five-year redemption period is far longer than that of a typical hedge fund and closer to the investment horizon for private equity and credit funds.
Other hedge funds have already tried to muscle in on the private credit market. Man Group, the world’s largest listed hedge fund, last year acquired US private credit company Varagon.
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