By Carolina Mandl

NEW YORK (Reuters) – ExodusPoint Capital Management reported a $1 billion drop in assets under management in the first half of 2024, according to a regulatory filing.

The filing gave no reason for the drop but a source familiar with the matter said it was due to withdrawals of money by clients.

ExodusPoint declined to comment.

The assets in the firm founded by Michael Gelband and Hyung Lee fell to $11.04 billion on June 30 from $12.02 billion at the end of last year, a regulatory filing from earlier this month showed. In December 2022, the hedge fund had $13.1 billion in assets.

The fund has been closed for new money since last year and has not been replacing any capital, a separate source familiar with the matter said.

ExodusPoint, which trades fixed income and equities assets across different strategies, has trailed peers this year, posting gains of 3.6% through July. On average, multi-strategy hedge funds posted gains of 6.3% in the same period, according to hedge fund research firm PivotalPath.

Rival Ken Griffin’s Citadel in comparison posted gains of 8.82%.

Launched in 2018 with $8 billion as the biggest hedge fund debut in history, ExodusPoint has also had some internal changes. Its co-founder Lee stepped down as head of equities and will serve as an adviser while Gelband has become chief investment officer, the second source said. Hedge Fund Alert reported earlier this month on the moves.

Investors have been more selective about multi-strategy funds, a category with total assets of more than $700 billion in the U.S., according to the Office of Financial Research’s Hedge Fund Monitor.

Global investor appetite for the most expensive multi-strategy hedge funds has fallen, a recent Goldman Sachs survey showed. Many multi-strategy hedge funds, including ExodusPoint and Citadel, charge clients by passing on all expenses related to money management.

Former Millennium co-chief investment officer Bobby Jain last month launched his multi-strategy hedge fund Jain Global with $5.3 billion in investment commitments, an amount that fell short of his initial target.

(Reporting by Carolina Mandl in New York; Editing by Megan Davies and Matthew Lewis)