Ex-Citadel Portfolio Manager Exits Millennium Hedge Fund

Market News: An ex-Citadel and now former portfolio manager to hedge fund Millennium is exiting the $56.3bn in AUM company.

Maulin Shah joined East53 last year after roles at Citadel, Perry Capital and Balyasny Asset Management, LinkedIn shows.

East53 is one of more than 270 investing pods at Millennium, which uses individual teams to wager across asset classes independently. 

Millennium remains one the biggest and most successful hedge fund platforms in the world. 

The hedge fund is also known for being one of the top 10 financial institutions shorting AMC Entertainment Holdings, Inc.

Financial institutions have lost billions this year from betting against ‘meme stocks’ with some, such as Melvin Capital who betted against GameStop, even shutting down.

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Millenium Hedge Fund Trading Team Shuts Down

East53 Capital, which makes merger arbitrage-focused investments, is closing up shop and its senior portfolio manager Maulin Shah is departing, via Bloomberg.

Millennium hedge fund’s trading team had the ability to take up to $3 billion in gross exposure, but is closing due to risky and excessive losses, people with knowledge of the matter said. 

It was burned in part by unsuccessful trading relating to Twitter (TWTR), Citrix Systems Inc., Tenneco Inc. and the proposed Rogers Communications Inc. takeover of Shaw Communications Inc.

A spokesman for Millennium declined to comment and Shah didn’t immediately respond to a request for comment.

New York-based Millennium posted year-to-date gains of 6% through June, Bloomberg News has reported.

Millennium is one of the few hedge funds posting gains this late into the year so far.

Short sellers have lost billions all year shorting Tesla, Apple, Amazon, and of course, AMC and GameStop.

Betting on deal announcements

Hedge funds focused on merger arbitrage attempt to profit from perceived market inefficiencies before or after a deal is announced.

Many have been hurt by a widening average spread on US transactions, which spiked above 15% over the past three months, up from 10% in January and near a similar level seen during the pandemic in early 2020, according to data compiled by Susquehanna International Group.

US hedge fund Millennium Management had closed several of its “pods” in 2020 run by teams of traders in response to losses related to violent market swings caused by growing fears over the economic impact of coronavirus. 

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