Matt Levine 8 MAR 23: The Good Hedge Funds Always Get Paid Also 10b5-1 plan abuse and some Elon Musk stuff

Matt is having an outstanding week explaining complicated stories in easy to understand bites even I can understand with Chemo Brain.

You want to read about a racket? Try 7 and 20 Hedge Fund here which Matt tears into:

These are very good times for large multi-strategy hedge funds, so it’s [time to turn the screws](

Izzy Englander’s Millennium Management has changed its terms to ensure that clients always pay a minimum fee, even if the hedge fund loses money.

They will now pay annual fees of about 1% of assets or 20% of investment gains — whichever is greater, according to a client letter seen by Bloomberg. It’s part of an effort to “reflect current industry-standard approaches” adopted by other multi-strategy peers, Millennium said in the Feb. 21 letter. …

Millennium, like most of its competitors, also passes along to clients expenses that include portfolio-manager compensation and legal and accounting costs. …

The new terms align with Millennium’s broader push to create a stable business that’s unencumbered by frequent redemptions or big reductions in annual income. The firm recently completed a plan to lock up client capital for longer, extending the full redemption period to five years from one. Its executives view reliable capital as a key tool to attract and retain talent and invest in technology and infrastructure, among other things.