HedgeCo.Net — Walleye Capital plans to return approximately $2 billion to clients as it scales back its internal equities business, Investing.com reported, citing Bloomberg. The return would bring the multistrategy firm’s hedge fund assets back to about $10 billion, roughly where they began the year, while Dockside, Walleye’s separately managed accounts business, would continue to oversee an additional $5 billion.
Walleye, which manages about $17 billion in total, told clients of the cash return as part of a plan to restructure its internal equity long/short unit. The firm had already disclosed that it was parting ways with head of equities Anil Gondi and a substantial share of the equities teams after a 5.9% loss in October, its worst month since March 2020, which left it down 6.8% for the year through October.
In his letter to clients, chief investment officer Will England said the firm is “going to lean into the businesses where we have a proven and differentiated right to win, including our Volatility, Quant and external businesses.” He said Walleye is not abandoning equity long/short entirely but acknowledged that its competitive advantage does not lie in replicating the traditional multi-manager stock-picking model; the strategy will continue through external manager allocations and support for select internal stock pickers. Mike Scheer, a former Jain Global portfolio manager, has joined to work directly for England, according to the report.
The size of the return puts a number on what had been an open question when the restructuring was announced. Walleye’s assets have grown from about $4 billion at the end of 2023, and the decision to hand back capital rather than redeploy it signals discipline on capacity at a time when crowded technology positioning hit several multistrategy peers in October.
For allocators, the move is a reminder that capacity is a strategy decision, not just a fundraising outcome. The next data points to watch are how the returned capital is distributed across share classes and whether other platforms that struggled in October follow with similar right-sizing.