Industry Updates

Izzy Englander may sell minority stake in Millennium to private equity firm

Monday, July 25, 2011

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Izzy Englander Opalesque Industry Update – Israel Englander may be planning to sell a minority stake in Millennium Management, and the Wall Street Journal reported that talks for a 20% share of the firm are currently estimated at a value of $300m to $500m.

The firm, which is up more than 6% according to investors, has done much better than many of its industry peers with the volatile 2011 markets. The firm has attracted $2bn in new investments, after dropping to $7bn after the financial crisis (it now stands at approximately $11bn).

Reportedly, Foundation Capital Partners, which is a newly launched private equity firm led by Dean Barr, who was the former CEO of Tribeca Global Management. Barr was coy with the WSJ, commenting only “Our purpose is to look at investment opportunities with the top funds in the world, and I cannot talk about private discussions." Foundation Capital has yet to make a major investment, but the firm has raised $1.5bn to deploy when it is ready. It is also run by Whitney Bower, formerly the founding partner at 3iGroup and before that at VC firm Bain Capital.

Englander was one of Opalesque’s first interviews on Opalesque TV. During that interview he shared with Matthias Knab some of the things he focused on in growing his business over the years. Englander said the Millennium fund "got beat" few times in its history, forcing him to "continually make the business better and better". He told Opalesque the firm had since increased the number of risk management, back-office and legal compliance staff. It is more regulated than most hedge funds as it is registered as a broker-dealer. It has invested in state-of-the-art technology (the firm runs 9 data centers with over 500 servers) and also has an outside administrator and an independent risk management firm providing transparency and portfolio information.”

It is also being reported that more fund managers than just Englander are hoping to sell stakes in their firms as a way to infuse more capital. Such a setup would also allow firms to position themselves for the long-term and be able to survive generational turnover of managers.

Opalesque NoteIn his first-ever video interview, Izzy Englander shared with Opalesque's Matthias Knab little known details and personal background of almost 40 years on Wall Street, including a stint in Chicago. The full interview may be watched here: Source

Kirsten Bischoff

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I congratulate Mr. Englander to this success. In late 2009 I sat down with him for an Opalesque.TV video interview (http://www.opalesque.tv/youtube/Izzy_Englander_Israel_A._Englander/1 - to this date is the only video/TV interview with him) to talk about his hedge fund and his 40 years on Wall Street.

Beginning in 1970 as a specialist clerk on the floor of the American Stock Exchange, Mr. Englander pointed out that his "immediate introduction into the business was of a transactional (and hedged) nature, opposed to fundamental analysis based or directional type investing". To this date, this approach has been at the core of Millennium. He has owned a specialist operation since 1982 and also chaired the Specialist Association.

Englander tells rare insights how he built his Millennium hedge fund, founded in 1989/90 with "$30m or $35m initial capital" to an institutional size, and what it entails to run a large multi- strategy hedge fund today. At the end of 2009, Millennium has 900 employees in 12 offices. 5000 servers are humming in the firm's datacenters, managed and programmed by 160 IT specialists and processing up to 2 million trades per day. Matthias Knab | July 26, 2011 03:20:35 PM