(Bloomberg) — Millennium Management Inc. this month closed two Asian centers for its index rebalancing business, people familiar with the matter said.
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The first portfolio manager was Xiao Ying and the second was Zachary Corones, both Hong Kong-based portfolio managers who are leaving the firm, said the people, who asked not to be identified discussing privacy.
The companies, which have been trading at about 1.2% since 2013, are expected to close in the coming days, with the number of shares trading at 1.2%.
A representative for Millennium declined to comment, and Mr. Xiao and Mr. Corones did not immediately respond to messages seeking comment sent via LinkedIn.
Hedge fund platforms like Millennium and Balyasny Asset Management LP allocate capital to pods that trade different strategies. They closely monitor how much each pod can withstand before trading risk is reduced or the team is shut down. This approach allows the firm to make steady profits even if individual pods incur losses when markets fluctuate.
On July 31, the Bank of Japan raised interest rates for the second time in 17 years and hinted at further hikes to come. Coupled with concerns about a weakening U.S. economy, global financial markets were thrown into turmoil for several days.
Japan's Topix index recorded its biggest three-day drop since 1959. The sharp price movements triggered circuit breakers, halting trading of the index futures.
As an investment strategy, index rebalancing typically involves betting that stocks will be added or removed from a stock index. Those changes affect stock prices, and trillions of dollars of passive funds buy and sell them. A niche field with around a dozen firms in 1998, index rebalancing has grown to more than 50 in recent years, including a pod of big multi-manager hedge-fund firms, one fund manager told Bloomberg News late last year.
Ms. Xiao, a highly regarded female senior portfolio manager in a male-dominated world, previously worked at Goldman Sachs Group Inc. and Squarepoint Capital Inc. Before joining Millennium in 2021, Mr. Corones was managing director of central risk and alpha strategies at Citigroup Inc., according to his LinkedIn profile.
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Millennium was founded in 1989 by Izzy Englander and manages more than $68 billion in assets, according to its website.
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