Though the average hedge fund lost money last year, Izzy Englander’s Millennium Management notched a nearly 5 percent gain in its offshore multistrategy hedge fund over the same period.
That was enough to net Englander a cool $750 million in personal earnings for 2018, landing him a slot on Institutional Investor’s annual Rich List ranking of the 25 highest-earning hedge fund managers.
His haul for 2018 bolstered his Rich List stats in another way: Englander has now qualified for the Rich List in 17 of its 18 years of existence, a distinction he shares with multistrategy rival Ken Griffin, the founder of Chicago-based Citadel. Only Renaissance Technologies founder James Simons has made the ranking all 18 years. The full list showing 2018 earnings will be published in the coming weeks.
Altogether, Englander has earned about $8 billion during this span, ranking sixth in lifetime earnings among all of those who have qualified for the Rich List. Millennium also ranks No. 12 on London-based investment firm LCH Investments’ annual ranking of the most successful hedge funds of all time, having made $22.4 billion for its investors since its 1989 inception.
Millennium employs roughly 200 investment teams and some 2,800 people. About two thirds of its capital is invested in relative-value fundamental equities and statistical arbitrage strategies. Roughly 75 percent of its assets are invested in the U.S.
In the fourth quarter the firm cut its exposure by 20 percent, according to an investor in the firm’s funds. As a result, the flagship fund made money in December, when stocks sharply declined, this person says. More important, in the fourth quarter Millennium was mostly uncorrelated to the broader market indexes.
Drilling down by strategy, last year equities kicked in roughly two percentage points to performance, fixed-income and commodities contributed one percentage point, and stat arb and quant strategies added two points, according to the investor.
As Institutional Investorrecently reported, at year-end Millennium raised $3.7 billion for a new five-year share class that permits investors to redeem just 5 percent of their assets each quarter, compared with the more common current policy of 25 percent per quarter. This boosted the firm’s total assets under management to $37.9 billion.
The new Millennium class roughly represents 10 percent of Millennium’s total capital, while another 10 percent is held by employees.
Englander, the son of Polish immigrants, is fairly private. But in a YouTube video, he can be seen dancing with a Hasidic rabbi at a wedding in 2017. In the video, Englander is the only person without a long beard.
Englander grew up in the Crown Heights section of Brooklyn in a religious home, attending yeshivas, or Jewish day schools. In an interview several years ago, he said he didn’t recall many conversations with his parents about what happened during the war — his father’s entire family was killed in the Holocaust — but “it was in the air” growing up.
Not surprisingly, Englander and his wife, Caryl, give large sums of money from their foundation each year to a wide array of Jewish organizations and yeshivas, as well as to hospitals. The Englander Institute for Precision Medicine at Weill Cornell Medicine uses genetics, genomic sequencing, and clinical data to treat cancer and other diseases.
Englander was drawn to the stock market as a teenager, trading stocks when he was still in high school. While attending New York University, he held summer jobs at investment firm Oppenheimer & Co. — where his future brother-in-law, Jack Nash, would go on to become president and chairman and eventually co-founder of the legendary Odyssey Partners hedge fund.
After graduating in 1970 with a bachelor of science degree in finance, Englander got a full-time job with Wall Street firm Kaufmann, Alsberg & Co. and enrolled in NYU’s MBA program at night. He fell in love with trading and never finished his MBA.
Englander spent several years trading convertible securities, doing merger arbitrage and trading options during that product’s early years. When the American Stock Exchange began listing options, he bought a seat on the exchange. In 1977 he created I.A. Englander & Co., a floor brokerage house on the Amex. Steven Tobias, who joined the firm the next year, continues to run it; Englander still has a passive minority interest.
Englander started Millennium with Ronald Shear, an acquaintance from the Amex. They began with $35 million, including $5 million from Englander and $2 million from the Belzberg brothers, wealthy Canadian financiers. The fund initially struggled, and after six months Shear left.