ExodusPoint Capital Management

Last updated
ExodusPoint Capital Management, LP
Type Private
Industry Investment management
FoundedApril 2017;6 years ago (2017-04)
Founders
  • Michael Gelband
  • Hyung Lee
Headquarters Park Avenue Tower, New York City, New York, U.S.
Products Hedge funds
Alternative investments
Quantitative finance
AUM US$ 13.2 billion (January 1, 2023)
Number of employees
622 (January 1, 2023)
Website www.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]

Contents

Background

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 that 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]

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References

  1. ↑ "Form ADV" (PDF). SEC.
  2. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 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 2023-02-18.
  3. ↑ Kishan, Saijel; Onaran, Yalman (2018-05-21). "Michael Gelband to Launch Biggest Hedge Fund Startup Ever". Bloomberg.com. Retrieved 2023-02-18.
  4. 1 2 3 4 5 6 Fortado, Lindsay (2018-05-21). "Gelband finalises largest hedge fund launch ever". Financial Times. Retrieved 2023-02-18.
  5. 1 2 3 4 5 Vardi, Nathan (October 25, 2017). "Billionaire Israel Englander Set For November Wall Street Battle Against His Former Bond Chief". Forbes. Retrieved 2023-02-18.
  6. 1 2 3 4 5 6 Shazar, Jon (January 4, 2018). "It Looks Like Michael Gelband Won His Arbitration Case Against Izzy Englander". Dealbreaker.
  7. ↑ Hu, Bei (2022-11-30). "Hedge Fund Hiring Spree Sweeps Big Multistrategy Firms in Asia". Bloomberg.com. Retrieved 2023-02-18.
  8. ↑ "Schonfeld Sues to Stop ExodusPoint From Poaching Employees (2)". news.bloomberglaw.com. October 2, 2018. Retrieved 2023-02-18.
  9. ↑ "Schonfeld Loses Bid for Injunction Against ExodusPoint in Suit". news.bloomberglaw.com. April 9, 2019. Retrieved 2023-02-18.
  10. 1 2 Levy, Rachael (October 24, 2019). "Executive to Leave ExodusPoint Hedge Fund After Less Than Two Years". WSJ. Retrieved 2023-02-18.
  11. ↑ Parmar, Hema (2020-01-08). "Ken Griffin's Citadel Beats Steve Cohen's Point72 With 19% Gain in 2019". Bloomberg.com. Retrieved 2023-02-18.
  12. 1 2 3 4 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 2023-02-18.
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