(Bloomberg) -- Millennium Management is backing a hedge fund started by former Echo Street Capital Management portfolio manager George Panos, as the multistrategy investment firm expands allocation to external traders.
Panos’ Sone Capital Management is set to start trading next month with capital from Millennium, according to people with knowledge of the matter. It is expected to debut with more than $500 million, a majority of which would be from Izzy Englander’s firm, said one of the people, who all asked not to be identified because the details are confidential.
Sone will join the likes of Delta Global Management, Diego Megia’s Taula Capital Management and Lorenzo Rossi’s Kedalion Capital Management in getting money from Millennium. Panos will run Millennium’s cash in a separately managed account and will also trade for other clients.
Representatives for Millennium and Sone declined to comment.
The deal is part of a growing trend among multistrategy hedge funds, which have been tapping a range of talent outside their own firms to help manage soaring assets. For smaller firms, such backing from giants is critical, especially at a time when data from the past five years show more closings of hedge funds than debuts.
Millennium, which has more than 330 teams of traders, remains one of the most prolific backers. Such arrangements make up about a 10th of Millennium’s trading teams, and many of the outside groups manage money exclusively for the firm, Bloomberg News has reported previously.
Earlier this year, Millennium decided to give billions of dollars to Coatue Management’s Aaron Weiner, who’s leaving the investment firm to start his own hedge fund.
Panos previously managed money for Echo Street which had about $11 billion in capital just before it decided to return outside cash, Bloomberg News has reported. Echo Street’s founder Greg Poole said at the time that he would invest in Panos’ fund. Sone will run a systematic market-neutral investment strategy, according to its website.
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