Millennium Management has incurred approximately $900 million in losses this year due to its focus on index rebalancing strategies. The strategy, which has recently faltered due to global stock market volatility, involves betting on which companies will be included or excluded from various stock indices. This approach, often highly leveraged, can be profitable for large multi-manager hedge funds like Millennium. However, the crowded nature of these trades coupled with market turbulence can lead to significant losses, even if portfolio managers make correct stock predictions.
Two teams at Millennium Management are primarily responsible for these strategies. Glen Scheinberg oversees the larger of the two teams, known as SRBL, while Pratik Madhvani manages another team focused on the same strategy from Dubai. Additionally, Jeremy Ma, a senior portfolio manager based in Hong Kong who also specialized in index rebalancing trades, has left the firm. Ma did not respond to requests for comment on this matter.
