Millennium Management targets CIOs of rival funds

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Millennium Management, the expansionary hedge fund that has been poaching from investment banks’ prop desks over the past two years, has made two high-profile hires from smaller competitors.

Max Trautman, managing partner and chief investment officer at hedge fund ZAN Partners, is now a portfolio manager at Millennium Management, according to sources close to the situation. He joined in May, according to filings on the Financial Conduct Authority register.

Meanwhile, Michael Cowley, who was chief investment officer at long-short equity hedge fund MC Squared Global Investors, also signed up to Millennium in late May.

Trautman was an executive director in Goldman Sachs’ proprietary trading operation until 2005 when he co-founded Peloton Partners, the hedge fund that famously collapsed during the financial crisis after losing $17bn in a few days. He left the venture in 2006, however, to start Stoneworks Asset Management.

Cowley worked for Bank of America Merrill Lynch from 2002-2007, but has since held roles at Citadel and Balyasny Asset Management.

Millennium is renowned for giving its portfolio managers a great deal of autonomy - the so-called 'sink or swim' method. They hire their own teams and are paid via their own profit and loss, with a centralised risk committee overseen by senior management, including its founder Izzy Englander. If you're successful, it's a profitable venture, but often employee turnover can be swift if a portfolio manager goes through a difficult period.

The hedge fund has increased headcount by nearly 30% in London over the past 12 months, and now has 122 FCA-approved employees, up from 86 in June 2013. The firm has reportedly been offering generous compensation packages to lure employees across including signing on bonuses and buying out deferred compensation.

It had $23.3bn in assets under management, as of 31 May, and and 895 investment professionals globally - 85 more than Q1 2013.

Millennium is, however, also still hiring  from the large investment banks. Tony Woods, a former executive director in Bank of America Merrill Lynch’s emerging markets trading team, joined as a portfolio manager earlier this month.

Woods also worked at Goldman, in its New York office until 2010, but has experience as a portfolio manager at Moore Capital Management and Graham Capital Management. He was at BAML for just 11 months before joining Millennium.

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