Hedge-fund manager Israel Englander has had a number of conversations with potential buyers, part of a broader plan to create a more institutionalized business rather than a one-man shop, according to several people with knowledge of the discussions. In part, he is looking to monetize his ownership stake, but Englander is also trying to broaden the firm’s ownership base.
certain to result in a deal, A source said, speaking on condition of anonymity because the discussions are not public. The stake would be for less than 20 percent of the hedge fund.
The AUM is an important factor for a potential buyer. Owners typically get a share of the revenue generated by the hedge fund fees, which can increase with a bigger asset base. As part of the broad marketing effort, Englander hired John Novogratz, formerly of the Fortress Investment Group, to oversee fund-raising. Prior to Mr. Novogratz’s arrival last year, Millennium had no focused marketing team.
The firm, however, does not have the typical hedge fund incentive to gather an endless supply of assets. Unlike most of its competitors, Millennium does not charge a management fee. Instead, it charges expense directly to the fund.
Millennium’s runs a platform model, which means that Mr. Englander and his team allocate cash to more than 100 teams of investors who utilize a variety of trading strategies. Izzy and other top managers do not typically discuss the themes or invest directly themselves. Rather they figure out who to hire and how much money to give them.