Walleye Capital to Return $2 Billion Following Equities Trading Reset
The hedge fund is downsizing its internal equities business to refocus on core strategies.
1Capital Return Strategy
Walleye Capital has announced plans to return approximately $2 billion to its clients. This decision follows a strategic move to scale back its internal equities trading operations. The firm aims to reduce its hedge fund assets to roughly $10 billion, returning to the total asset level it held at the start of 2025.
2Operational Restructuring Details
The firm informed clients of this shift on November 5. As part of the internal revamp, Anil Gondi, the head of equities, has departed the company. A substantial portion of the equities team was also let go, signaling a significant reduction in the firm's direct involvement in traditional stock picking and trading activities.
3Maintaining Core Business Units
Despite the reduction in equities, Walleye will continue managing $5 billion in assets through its Dockside separately managed accounts business. Chief Investment Officer Will England stated the firm will lean into areas where it has a proven advantage, specifically focusing on volatility, quantitative strategies, and its established external manager allocation business models.
4Competitive Market Landscape
Walleye operates within a highly competitive hedge fund environment dominated by industry giants like Millennium Management and Citadel. These large firms have seen massive growth, with ten major multistrategy funds overseeing $2.2 trillion by the end of 2025. This concentration of capital has intensified the ongoing, expensive war for top-tier investment talent.
5Performance and Market Context
The firm reported a 5.9% loss in October, contributing to a total decline of 6.8% for the year through the end of last month. These results highlight the challenges smaller or mid-sized firms face when attempting to compete directly against the massive scale and resources of the industry's largest multistrategy hedge fund players.
6Strategic Talent Acquisition
While cutting back on its broader equities team, the firm is still making targeted hires. Mike Scheer, a former portfolio manager at Jain Global, is joining the firm to work directly under CIO Will England. Scheer will specialize in high-conviction stock picking, representing the firm's refined approach to internal equity market participation.
7Future Trading Model
Walleye is not completely exiting the equity long/short trading space. Instead, it is shifting its model away from replicating traditional multi-manager stock trading. The firm will maintain exposure through its external manager allocations and by supporting a select group of internal stock pickers who demonstrate the highest conviction in their specific market strategies.
8Growth and Market Position
Walleye has experienced significant growth, with assets rising from approximately $4 billion at the end of 2023 to $17 billion recently. This restructuring represents a pivot to preserve that growth by focusing on differentiated strengths rather than competing in overcrowded segments where the firm lacks a clear, sustainable competitive advantage over rivals.