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ExodusPoint Capital Management

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ExodusPoint Capital Management, LP
Company typePrivate
IndustryInvestment management
FoundedApril 2017; 7 years ago (2017-04)
Founders
  • Michael Gelband
  • Hyung Lee
HeadquartersPark Avenue Tower, New York City, New York, U.S.
ProductsHedge funds
Alternative investments
Quantitative finance
AUMUS$12 billion (January 1, 2024)
Number of employees
646 (January 1, 2024)
Websitewww.exoduspoint.com
Footnotes / references
[1]

ExodusPoint Capital Management (ExodusPoint) is an American investment management firm headquartered in New York City with additional offices in Europe and Asia. It currently holds the largest launch in history for hedge funds where it raised $8.5 billion in 2018 after it started accepting capital from external investors.[2][3][4]

Background

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In early 2017, ExodusPoint was founded by Michael Gelband and Hyung Lee.[2][4][5][6] Both of them were previously employees at Millennium Management where Gelband was Head of Fixed income while Lee was Head of Equities.[2][4][5][6] Gelband was once seen as the heir to Israel Englander but after he was declined an ownership stake in the firm, he left to start ExodusPoint.[2][4][5][6] Several employees from Millennium Management also left to join the new firm.[2][5][6] Shortly after, Millennium Management filed an arbitration case against Gelband to stop him from poaching staff from it.[2][5][6] Although the results were not made public, it is believed that Gelband won the lawsuit and was able to take staff from Millennium Management to establish his firm.[6]

In 2018, ExodusPoint started accepting capital from external investors.[2][4] In June of that year, it launched with $8.5 billion in capital, making it the largest start-up hedge fund in history.[2][4] Instead of charging the standard management fee, ExodusPoint will pass on unlimited costs to investors. These fees are expected to be "substantial" over time, making it more expensive than its peers.[2]

Since launching, ExodusPoint has expanded rapidly by quickly increasing its headcount and opening new offices.[2][7] In October 2018, Schonfeld Strategic Advisors sued ExodusPoint to stop it from poaching its employees. ExodusPoint eventually won the lawsuit.[2][8][9]

Despite having a strong debut, ExodusPoint has struggled in its performance compared to its peers.[2][10] In 2019, ExodusPoint had a return of 6.8% compared to the Hedge Fund average of 9%.[11] In 2022, ExodusPoint had a return of 5.5% to 6% which was lower than its peers including Millennium Management which had over double the return at 12.4%.[12] One of the main reasons for its overall lackluster performance is the significant under-performance of its equities and quantitative finance businesses despite the large investments placed into them.[2][12]

Since its launch, ExodusPoint has only performed fundraising once in the spring of 2020 when it raised $3 billion.[12]

In recent years, the firm suffered from significant staff turnover and numerous senior executives have already left the firm.[2][10][12]

In 2023, investors withdrew $1 billion from ExodusPoint.[13]

See also

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References

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  1. ^ "Form ADV" (PDF). SEC.
  2. ^ a b c d e f g h i j k l m n Morrell, Alex; Saacks, Bradley (April 21, 2022). "How ExodusPoint — the biggest hedge fund launch in history — continues to amass billions despite lackluster returns". Business Insider. Retrieved February 18, 2023.
  3. ^ Kishan, Saijel; Onaran, Yalman (May 21, 2018). "Michael Gelband to Launch Biggest Hedge Fund Startup Ever". Bloomberg.com. Retrieved February 18, 2023.
  4. ^ a b c d e f Fortado, Lindsay (May 21, 2018). "Gelband finalises largest hedge fund launch ever". Financial Times. Retrieved February 18, 2023.
  5. ^ a b c d e Vardi, Nathan (October 25, 2017). "Billionaire Israel Englander Set For November Wall Street Battle Against His Former Bond Chief". Forbes. Retrieved February 18, 2023.
  6. ^ a b c d e f Shazar, Jon (January 4, 2018). "It Looks Like Michael Gelband Won His Arbitration Case Against Izzy Englander". Dealbreaker.
  7. ^ Hu, Bei (November 30, 2022). "Hedge Fund Hiring Spree Sweeps Big Multistrategy Firms in Asia". Bloomberg.com. Retrieved February 18, 2023.
  8. ^ "Schonfeld Sues to Stop ExodusPoint From Poaching Employees (2)". news.bloomberglaw.com. October 2, 2018. Retrieved February 18, 2023.
  9. ^ "Schonfeld Loses Bid for Injunction Against ExodusPoint in Suit". news.bloomberglaw.com. April 9, 2019. Retrieved February 18, 2023.
  10. ^ a b Levy, Rachael (October 24, 2019). "Executive to Leave ExodusPoint Hedge Fund After Less Than Two Years". WSJ. Retrieved February 18, 2023.
  11. ^ Parmar, Hema (January 8, 2020). "Ken Griffin's Citadel Beats Steve Cohen's Point72 With 19% Gain in 2019". Bloomberg.com. Retrieved February 18, 2023.
  12. ^ a b c d Morrell, Alex (February 2, 2023). "ExodusPoint, the largest hedge fund launch in history, shed assets and employees amid mixed performance last year". Business Insider. Retrieved February 18, 2023.
  13. ^ Parmar, Hema (March 27, 2024). "ExodusPoint Clients Yanked $1 Billion From Hedge Fund Last Year". Bloomberg.com. Retrieved July 6, 2024.
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