Hedge fund giants Citadel and Millennium post strong first-half gains

According to a new report from Financial Times, hedge funds Citadel and Millennium have achieved notable gains in the first half of the year, continuing a strong trend for multi-manager firms, which are becoming increasingly dominant in the industry. Ken Griffin’s Citadel flagship Wellington fund rose by 8.1% by the end of June, while Izzy Englander’s Millennium fund increased by 6.9%, according to the report. Though these returns fall short of the S&P 500's 15% gain over the same period, they surpass the average 5.2% gain by hedge funds through the end of May, based on data from Hedge Fund Research. Multi-manager hedge funds employ numerous teams of traders across various asset classes and strategies, all managed by a centralized risk system designed to minimize significant losses.

Citadel and Millennium, managing $63 billion and $67.7 billion in assets respectively, aim to generate profits for investors even when broader markets decline. Both funds were profitable in 2022 when the S&P 500 dropped 19.4%. Investors are eager to invest in the multi-manager sector, which includes firms like Steve Cohen’s Point72, Balyasny, and smaller rivals such as Eisler, to secure steady returns. Unlike many hedge funds, multi-manager firms typically pass on their operational costs, such as office rents, salaries, and client entertainment, to investors, while also charging performance fees.