It was 5 p.m. in New York on Tuesday when Schonfeld made the pivotal call to Englander, ending months-long negotiations.
The deal, which could have marked a significant consolidation among mega-multimanager firms, ultimately fell through.
Schonfeld withdrew after securing up to $3 billion in commitments from new and existing investors, showcasing confidence in its ability to navigate the current market challenges.
This move comes amidst a period of rapid growth for Schonfeld, coupled with a competitive talent war within the industry.
As part of the new plan, the firm will make strategic job cuts, predominantly non-investment roles, to streamline operations. The focus is now on deploying the newly raised capital effectively.
A noteworthy aspect is the structure of the capital infusion a drawdown facility allowing the firm flexibility in accessing funds as needed.
However, investors face a lock-up period, unable to make withdrawals for three years after Schonfeld deploys the capital, showcasing a broader trend among multimanager funds to retain investor capital for longer durations.
Had the partnership materialized, Millennium could have leveraged over 100 investment teams at Schonfeld, whose assets stood at $11.7 billion at the beginning of the month.
While Schonfeld's main fund has seen modest gains this year, the decision to walk away from the deal signals a belief in the firm's ability to navigate market challenges independently.
#Quants #Millennium #Schonfeld #Hedgefunds #Marketaccess
Dean of the Kogod School of Business at American University. Former Executive at The Carlyle Group. Author.
4mo👏🏻👏🏻👏🏻 Mike Arpey