Key Takeaways
- • Arini's roughly $7 billion flagship credit fund was reported down more than 26% this year, with bank margin calls forcing debt sales said to top $2 billion in face value, a financing-driven event rather than a mark-to-market adjustment.
- • Walleye lost 5.9% in October, its worst month since March 2020, and said it would simplify its internal equity long/short business, part ways with Anil Gondi and a substantial share of the team, and return a portion of capital.
- • Millennium withdrew more than $1.5 billion of leveraged capital from external managers Troluce Capital Advisors (more than $1 billion) and Axebrook Capital ($500 million) after losses, according to Bloomberg.
- • Blackstone said its European direct lending vehicles, including BXDE IV and anticipated leverage, hold about €13 billion of investable capital, while Apollo's European Credit Company launched with more than €10 billion of lending capacity.
- • Allocators should treat the liquid hedge fund de-risking and the private credit capital build-out as separate cycles rather than netting them in a single alternatives risk budget.
Summary
Hedge fund platforms cut sleeves, withdrew allocations, and returned capital during the same week that private credit managers continued to add lending capacity. Arini's roughly $7 billion flagship credit fund was reported down more than 26% this year, with bank margin calls forcing debt sales said to exceed $2 billion in face value. The article characterizes these sales as a financing event: the banks providing leverage called for margin against a concentrated credit book.
Walleye lost 5.9% in October, its worst month since March 2020. In a letter from CEO Will England, the firm described a structural response that included parting ways with Anil Gondi and a substantial share of its internal equity long/short team, simplifying that business, and returning a portion of capital. Engineers Gate took a narrower step, dismissing most of its Synthesis fundamental equities team after October losses tied to the technology selloff. That sleeve was roughly 14% of gross market value, and the firm was down about 5.5% for October through October 23.
Millennium withdrew more than $1.5 billion of leveraged capital from two external managers after losses, according to Bloomberg: more than $1 billion from Troluce Capital Advisors and $500 million from Axebrook Capital. The article notes this is a platform reclaiming capital allocated to managers operating under its risk limits, not an investor redemption. PivotalPath research cited in the piece estimates that the ten largest multistrategy hedge funds ran about $2.2 trillion of gross assets on $360 billion of net capital at the end of 2025, roughly six times leverage, with pod platforms at eight to 14 times and increasingly overlapping positions.
In private credit, Blackstone closed its fourth institutional European direct lending fund, BXDE IV, and said its €13 billion investable capital figure spans that fund and other European direct lending vehicles, including anticipated leverage, rather than a single pool of LP commitments. Apollo launched European Credit Company with more than €10 billion of lending capacity, backed by Apollo funds and affiliates alongside ADIC, Athora, Norinchukin, Standard Chartered and Aranda Principal Strategies. Sagard Private Equity closed its third emerging manager fund at €520 million, about three times its predecessor and above a €400 million target.
The article also notes that Sequoia is closing its London office after about six years, cutting parts of its Europe team and sunsetting its batch accelerator and Scouts programs, and that Schroders brought its Schroder International Selection Fund Emerging Market Bond strategy onchain through Centrifuge on Solana. The author's central guidance for allocators is to stop netting these developments: reduced hedge fund exposure does not indicate whether private credit valuations or pricing have changed, and allocators should check whether risk coming off at Arini, Walleye and Millennium's external managers shows up in wider spreads or simply a smaller hedge fund allocation alongside an unchanged credit sleeve.
Walleye lost 5.9% in October, its worst month since March 2020. In a letter from CEO Will England, the firm described a structural response that included parting ways with Anil Gondi and a substantial share of its internal equity long/short team, simplifying that business, and returning a portion of capital. Engineers Gate took a narrower step, dismissing most of its Synthesis fundamental equities team after October losses tied to the technology selloff. That sleeve was roughly 14% of gross market value, and the firm was down about 5.5% for October through October 23.
Millennium withdrew more than $1.5 billion of leveraged capital from two external managers after losses, according to Bloomberg: more than $1 billion from Troluce Capital Advisors and $500 million from Axebrook Capital. The article notes this is a platform reclaiming capital allocated to managers operating under its risk limits, not an investor redemption. PivotalPath research cited in the piece estimates that the ten largest multistrategy hedge funds ran about $2.2 trillion of gross assets on $360 billion of net capital at the end of 2025, roughly six times leverage, with pod platforms at eight to 14 times and increasingly overlapping positions.
In private credit, Blackstone closed its fourth institutional European direct lending fund, BXDE IV, and said its €13 billion investable capital figure spans that fund and other European direct lending vehicles, including anticipated leverage, rather than a single pool of LP commitments. Apollo launched European Credit Company with more than €10 billion of lending capacity, backed by Apollo funds and affiliates alongside ADIC, Athora, Norinchukin, Standard Chartered and Aranda Principal Strategies. Sagard Private Equity closed its third emerging manager fund at €520 million, about three times its predecessor and above a €400 million target.
The article also notes that Sequoia is closing its London office after about six years, cutting parts of its Europe team and sunsetting its batch accelerator and Scouts programs, and that Schroders brought its Schroder International Selection Fund Emerging Market Bond strategy onchain through Centrifuge on Solana. The author's central guidance for allocators is to stop netting these developments: reduced hedge fund exposure does not indicate whether private credit valuations or pricing have changed, and allocators should check whether risk coming off at Arini, Walleye and Millennium's external managers shows up in wider spreads or simply a smaller hedge fund allocation alongside an unchanged credit sleeve.
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