Earlier this year, Israel Englander's $35 billion hedge fund, Millennium Management LLC, suffered the abrupt departure of its head of fixed income, Michael Gelband, an executive some once viewed as Mr. Englander's possible heir apparent.
Now, Millennium is hiring Mark Tsesarsky, a 31-year Citigroup Inc. veteran, as its new co-head of fixed income and commodities business, according to people close to the matter. Citigroup announced the news internally this morning, and Millennium told its investors Monday.
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Some traders said the fixed-income job at Millennium is among the most attractive on Wall Street. Millennium employees are generally paid based on a strict formula dictated by factors including returns and assets under management. Because Mr. Gelband oversaw as much as 20% of Millennium's capital and the performance had been impressive, his annual compensation in some years was as much as $60 million, according to people close to the matter. The compensation came despite the fact that Mr. Gelband, like other Millennium group heads, never invested directly for the firm.
Mr. Gelband left this year amid unhappiness that he no longer was seen as front-runner to succeed Mr. Englander, the people said. He couldn't be reached for comment.
At Citigroup, Mr. Tsesarsky was a managing director focused on securitizations. Now he will help run dozens of traders betting on various bond markets, a business that represents about $7 billion of Millennium's assets under management.
The hire comes as Millennium, known for stellar performance and trading teams focused on markets around the globe, deals with challenging markets. The Millennium International Ltd. fund is up 2.6% so far this year, according to an investor, after rising 3.4% in 2016. In the previous three years, the fund rose about 12.5% annually and it has an average annual return of nearly 14% since launching in 1989.
Millennium, which has more than 2,000 employees, is one of the few hedge funds to continue to attract investors in recent years, leading to steady growth, even as much of the hedge-fund industry finds it harder to attract new clients amid poor performance since 2009. The growth comes even though Millennium charges higher fees than most hedge funds.
Mr. Tsesarsky will work with John Anderson, who has been the head of the hedge fund's commodities business after joining the firm two years ago from J.P. Morgan Chase & Co.
Millennium will combine its fixed-income and commodities business. Mr. Tsesarsky and Mr. Anderson will co-head the combined businesses, according to someone close to the matter. Mr. Tsesarsky will be based in New York, while Mr. Anderson is in London.
Mr. Tsesarsky's compensation isn't clear given that he will split the fixed-income duties but also will oversee the commodities business.
Write to Gregory Zuckerman at firstname.lastname@example.org
(END) Dow Jones Newswires
May 02, 2017 17:08 ET (21:08 GMT)