Javier Velazquez has decided to hand back the capital of outside investors, so his company will now serve solely Millennium Management, the firm where he once worked and that has been his biggest backer.
The deal resembles one Millennium made with Bobby Jain's Jain Global in April. Millennium will replace all external money at Albar Capital Partners, an investment firm employing a market-neutral long-short equities strategy, according to people familiar with the situation. It will remain operationally independent, the people said. They requested anonymity because the specifics were confidential.
Representatives for Millennium and Albar, which is based in London and oversees around $1.5 billion, would not comment.
Albar began trading in July 2018 with seed funds from Millennium. An investor document reviewed by Bloomberg shows the fund concentrated on European equities, with smaller exposure to US and Asian stocks. Albar returned 1.1 percent in the first six months of this year and has been profitable in every full year since launch except 2018.
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Millennium's move to become Albar's sole capital provider builds on that seed relationship. It gives the larger firm direct access to a strategy it has helped support since the fund's earliest days.
Millennium has followed this playbook before.
In April, Millennium and Jain Global entered a strategic partnership in which Jain gave back all external money from its multistrategy fund and now invests exclusively for Millennium. Neville Shah had also been in charge at the separate firm Kodai Capital Management before handing back outside money and going back to Millennium.
Millennium, led by Izzy Englander, has built a $92 billion business by recruiting and backing specialist trading talent, much like other large multistrategy firms. The company has moved beyond internal teams, helping traders launch boutique funds and investing in a growing list of external hedge funds. Bloomberg News has reported that Millennium is exploring additional deals in which it provides the capital for outside managers and removes their existing outside investors.
For Albar, this arrangement gives it a stable single source of money, eliminating the administrative burden of managing many outside relationships. For Millennium, the deal secures exclusive access to a strategy it has already supported for years. It also fits Millennium's broader tendency to externalize portfolios while keeping the investor base concentrated internally.
These single-investor structures have become another way multistrategy firms work with independent managers. Instead of keeping every portfolio inside one fund, the large firm provides the capital and the outside manager retains its own operations and investment decisions.
For outside investors in Albar, the return of capital means they lose access to a fund that has delivered positive returns in most years since it started. It also reflects a growing trend across the hedge fund industry, where large multistrategy firms increasingly strike partnerships with independent managers and become their dominant or sole clients.
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