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ExodusPoint Hedge Fund Reopening to Raise Over $2 Billion

Nishant Kumar

(Bloomberg) -- ExodusPoint Capital Management, which launched last year with a record $8 billion in assets, is setting out to collect billions more.

The hedge fund, co-founded by Michael Gelband and Hyung Lee, aims to gather more than $2 billion starting in the second quarter of 2020, according to people familiar with the matter.

In a memo to investors, ExodusPoint said it would give a formal timeline for its fund-raising over the next few weeks. The funds have been closed since October 2018.

Gelband, the one-time heir apparent to Millennium Management founder Izzy Englander, last year struck out on his own and broke fundraising records for a hedge-fund startup.

If successful, the latest capital raise will run counter to the flight from hedge fund investments. Clients have yanked $77 billion from hedge funds so far this year, twice as much as in all of 2018, while closures have outnumbered launches since 2015, according to data compiled by eVestment and Hedge Fund Research.

ExodusPoint has been adding to its investment team with recent hires from peers such as Man Group Plc and Schonfeld Strategic Advisors. It currently has around 62 portfolio management teams, which it expects to grow to 70 by the end of the year, according to one of the people.

The hedge fund has been deploying capital throughout the year and currently has allocated about 85% of its risk, the people said. ExodusPoint expects to invest all this capital before taking in fresh money. The fundraising will end in the third quarter of next year, the memo said.

A spokesman for the New York-based firm declined to comment.

Capital Drought

Gelband’s performance has lagged behind peers since its blockbuster start. His fund gained 5.1% through October this year, while hedge funds on average have returned 7.2% this year, according to Hedge Fund Research.

Despite the drought of capital around hedge funds, some money managers with a proven track record have convinced investors to back their funds. Martin Taylor, who shuttered Nevsky Capital more than three years ago, returned to the industry and raised about $1.6 billion, making his Crake Asset Management the biggest hedge fund startup in Europe this year.

Other successes include the $2 billion launch of Woodline Partners in August and Cinctive Capital Management’s $1 billion fundraising.

To contact the reporter on this story: Nishant Kumar in London at nkumar173@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Marion Dakers, Sree Vidya Bhaktavatsalam

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