Key Takeaways
- • Walleye Capital plans to return approximately $2 billion to clients, reducing its hedge fund assets to about $10 billion, roughly where they began the year, according to Bloomberg as reported by Investing.com.
- • The capital return is part of a restructuring of Walleye's internal equity long/short unit, following a 5.9% loss in October, its worst month since March 2020, which left the firm down 6.8% for the year through October.
- • Head of equities Anil Gondi and a substantial share of the equities teams are departing as the firm scales back its internal stock-picking model.
- • Walleye will lean into its Volatility, Quant and external businesses, with equity long/short continuing through external manager allocations and select internal stock pickers.
- • Dockside, Walleye's separately managed accounts business, will continue to oversee an additional $5 billion, out of roughly $17 billion in total firm assets.
Summary
Walleye Capital plans to return approximately $2 billion to clients as it scales back its internal equities business, according to Bloomberg, as reported by Investing.com. The return would bring the multistrategy firm's hedge fund assets back to about $10 billion, roughly where they began the year. Dockside, Walleye's separately managed accounts business, would continue to oversee an additional $5 billion. Walleye manages about $17 billion in total.
The cash return is part of a plan to restructure the firm's internal equity long/short unit. Walleye had already disclosed that it was parting ways with head of equities Anil Gondi and a substantial share of the equities teams after a 5.9% loss in October, its worst month since March 2020. That loss left the firm down 6.8% for the year through October. Walleye's assets have grown from about $4 billion at the end of 2023.
In a letter to clients, chief investment officer Will England said the firm is "going to lean into the businesses where we have a proven and differentiated right to win, including our Volatility, Quant and external businesses." He said Walleye is not abandoning equity long/short entirely, but acknowledged that its competitive advantage does not lie in replicating the traditional multi-manager stock-picking model. The strategy will continue through external manager allocations and support for select internal stock pickers. Mike Scheer, a former Jain Global portfolio manager, has joined to work directly for England, according to the report.
The decision to return capital rather than redeploy it signals discipline on capacity, coming at a time when crowded technology positioning hit several multistrategy peers in October. For allocators, the move underscores that capacity is a strategy decision rather than solely a fundraising outcome. Open questions include how the returned capital will be distributed across share classes and whether other platforms that struggled in October will follow with similar right-sizing.
The cash return is part of a plan to restructure the firm's internal equity long/short unit. Walleye had already disclosed that it was parting ways with head of equities Anil Gondi and a substantial share of the equities teams after a 5.9% loss in October, its worst month since March 2020. That loss left the firm down 6.8% for the year through October. Walleye's assets have grown from about $4 billion at the end of 2023.
In a letter to clients, chief investment officer Will England said the firm is "going to lean into the businesses where we have a proven and differentiated right to win, including our Volatility, Quant and external businesses." He said Walleye is not abandoning equity long/short entirely, but acknowledged that its competitive advantage does not lie in replicating the traditional multi-manager stock-picking model. The strategy will continue through external manager allocations and support for select internal stock pickers. Mike Scheer, a former Jain Global portfolio manager, has joined to work directly for England, according to the report.
The decision to return capital rather than redeploy it signals discipline on capacity, coming at a time when crowded technology positioning hit several multistrategy peers in October. For allocators, the move underscores that capacity is a strategy decision rather than solely a fundraising outcome. Open questions include how the returned capital will be distributed across share classes and whether other platforms that struggled in October will follow with similar right-sizing.
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