Goldman Sachs is offering its clients the opportunity to invest in Izzy Englander’s Millennium Management, one of the world’s largest hedge funds.
Why it matters: This rare chance for wealthy individuals to gain equity in a successful hedge fund could attract investors seeking to diversify their portfolios with a historically stable performer.
The details:
- Goldman Sachs aims to raise between $1 million and $20 million from each client to sell a 10%-15% stake in Millennium, which is valued at approximately $14 billion.
- At the higher end of the range, this would mean a $2 billion raise, with roughly half coming from Goldman’s Petershill Partners unit and the rest targeting large institutions, such as existing sovereign-wealth fund clients.
- Clients investing through Petershill’s special-purpose vehicle will face an additional 1% management fee and 10% carry, while institutions buying their stakes directly in Millennium will not pay this extra layer of fees.
- Millennium’s hedge fund has lost money in only one year since 1990, achieving returns of 10% or more in all but nine years, and client funds are locked up for five years, reducing the potential for sudden outflows.
The move to sell a stake in Millennium is notable as it would make the hedge fund giant among the first to tap a wider range of buyers, and could represent a significant opportunity for investors to gain equity in a well-established and successful hedge fund.
What they’re saying:
- “The involvement of Petershill indicates an attempt to broaden the pool of potential buyers to include wealthy individuals.” – Sources familiar with the matter
- “Earlier this year, Verition Fund Management entered into an agreement to sell a minority stake in the firm to Affiliated Managers Group.” – Published by SPH Media Limited
- “Last year, Ken Griffin stated he would be open to the possibility of selling a minority stake in Citadel, the multistrategy hedge fund he founded in 1990.” – Published by SPH Media Limited
What’s next: The strategic offering aligns with Goldman Sachs’ efforts to provide exclusive investment opportunities to its high-net-worth clients, ensuring they have access to diverse and lucrative investment options.