Walleye Capital to return $2 billion to clients after equity cuts - report

Walleye Capital intends to return roughly $2 billion to its clients as the hedge fund reduces its equities trading operations, as per a Bloomberg report on Friday. The company plans to trim its hedge fund assets to around $10 billion, returning it to the level observed at the beginning of the year. Dockside, Walleye's separately managed accounts business, will retain an additional $5 billion in assets, according to the report.

The multistrategy hedge fund, managing approximately $17 billion in total assets, notified clients of the cash return on Wednesday as part of a restructuring plan for its internal equities business. Anil Gondi, Walleye's head of equities, was among those dismissed alongside a large portion of the equities teams. Chief Investment Officer Will England detailed the firm's strategy in a letter to clients, stating the company will focus on areas where it has a proven and differentiated advantage, such as Volatility, Quant, and external businesses.

England clarified that Walleye is not abandoning equity long/short trading entirely; instead, the firm will continue through external manager allocations and support for select internal stock pickers. The company's assets had risen to about $4 billion by the end of 2023. Walleye experienced a 5.9% loss in October, reducing its year-to-date decline through last month to 6.8%. Mike Scheer, a former Jain Global portfolio manager, recently joined the firm to work closely with England.