(Bloomberg) — Schonfeld Strategic Advisors still hasn’t raised the $3 billion it has been seeking since late last year.
Most Read from Bloomberg
“We haven’t yet formalized a drawdown facility partnership,” the hedge fund firm said in a letter to employees seen by Bloomberg. “We remain in active discussions with the initial set of investors we engaged with in Q4.”
Schonfeld also said that new interested parties emerged in the first quarter.
A representative for the firm, with $10 billion of assets as of January, declined to comment.
Read More: Schonfeld Clients Pull $1.7 Billion, Firm Nears $3 Billion Deal
Schonfeld had viewed the capital raise as a better alternative to a proposed partnership with $63 billion multistrategy hedge fund Millennium Management.
In November, Steve Schonfeld’s firm — which grappled with poor performance, redemptions and high costs last year — pulled out of the talks after securing verbal commitments from new and existing investors. The firm’s Strategic Partners fund gained 6.2% this year through March, while its Fundamental Equity money pool returned 5.9%.
The capital it’s still seeking would be placed in a drawdown fund, meaning Schonfeld could tap it as needed, to replenish any further redemptions and feed it into the firm’s flagship fund, Strategic Partners. Investors in the vehicle will receive a 25% revenue share, according to people familiar with the matter.
Some investors worry that Schonfeld may continue facing redemptions after $4 billion was pulled last year.
Of the $8 billion in its Strategic Partners multistrat fund, about $2 billion is eligible for monthly withdrawals — and another $2 billion will become eligible once a one-year lockup expires at the end of 2024, the people said.
The firm is trying to pivot its investor base to one with more locked-up cash. Any assets raised for the new fund will be retained for three years once invested.
(Updates with additional context starting in seventh paragraph.)
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.
