Schonfeld Provides $1.6 Billion Boost to Meridiem After Millennium Exit

In the first six months, Malik's fund generated a return of 13.6%. John Golden will lead capital raising, investor relations, and business development.

Malik, who founded Meridiem in 2021, previously worked at Citadel's Surveyor Capital and SAC Capital Advisors, where he developed his sector-focused market-neutral approach. His background at these top-tier firms likely helped the fund regain investor confidence after Millennium's withdrawal.

Spokespeople for Meridiem and Schonfeld both declined to provide any remarks.

Revival and Resilience

The revival of Meridiem stands as a rare case of a hedge fund bouncing back after losing major client money. This also highlights the increasing hunger from multistrategy funds - which depend on groups of traders - to invest in outside managers.

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Large allocators like Schonfeld, Millennium, and Qube Research & Technologies allocate billions to external managers to access novel investment skills and put their growing capital to work. Schonfeld's history includes numerous instances of providing capital to external trading teams.

In 2023, Schonfeld provided $500 million to Omar Newera's fund based in Abu Dhabi. Nicolas Monaghan, previously a money manager at Garda, started his own hedge fund Mistral Capital using Schonfeld capital. Schonfeld also supported Nabil Ouajjane's Aster Capital in 2019.

Such moves by large allocators are not uncommon; Millennium, for instance, regularly rebalances its capital allocations among external managers based on performance and strategic fit. For Meridiem, the loss of Millennium's $1.5 billion could have been devastating, but Malik's quick pivot to Schonfeld demonstrated the resilience of his firm's investment approach and the strength of his professional network.

The Multi-Manager Capital Model

This type of capital is often described as a powerful propellant, capable of rapidly accelerating the growth of both young and established hedge funds. Yet Marc Gilly, partner at Canepa Global Managers, cautioned, "This funding is fuel that can easily catch fire," explaining that it may disrupt a firm's stability without durable capital.

Meridiem, founded by Malik in 2021, maintains its main offices in Dallas and New York. The hedge fund industry has seen a growing trend of multi-manager platforms like Schonfeld providing capital to external managers, allowing them to scale quickly while the allocator diversifies its trading talent. However, as Gilly noted, such funding can be volatile if not supplemented by stable capital.

Meridiem's Strategy and Outlook

Meridiem's strategy of focusing on specific sectors in a market-neutral fashion aims to reduce directional risk, which may appeal to allocators seeking consistent returns. Malik's market-neutral approach, honed at Citadel and SAC Capital, targets sector-specific opportunities while hedging out broad market moves. This discipline, combined with a strong early performance of 13.6% in six months, likely reinforced Schonfeld's decision to step in after Millennium's exit. The fund now aims to reach $2 billion in assets by year-end, with John Golden spearheading capital-raising efforts.

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