- Cisu Capital, run by former Elliott portfolio manager Mark Wills, launched its commingled fund Monday.
- The firm first began trading with an SMA with roughly $200 million from Squarepoint in August.
- The commingled fund has more than $100 million, thanks in part to a large endowment’s backing.
Elliott Management spinout Cisu Capital has started trading in its first commingled fund, seven months after it began managing money for a single outside investor.
Cisu, run by former Elliott portfolio manager Mark Wills, began trading with capital from hedge fund Squarepoint in August, running $200 million in a separate account. Its commingled fund raised more than $100 million, two people familiar with the firm told Business Insider, with a large endowment among the new investor base.
London-based Cisu declined to comment.
Wills spent more than a decade at billionaire Paul Singer’s firm, with a stop at King Street Capital prior to that. His new firm, which focuses on the financial services sector, has been able to do what many new launches have struggled to do: Raise a commingled fund.
Commingled funds have large pools of investors and are what investors have typically signed on to when investing into a hedge fund, while SMAs offer a tailored investment strategy. This often allows LPs to customize risk limits, liquidity terms, and fees.
A ripple effect of the growth of big-name platforms such as Millennium has been an increase in the number of new managers being launched via separately managed accounts. Large allocators often prefer SMAs because they give them more transparency on a manager’s holdings and they can negotiate on fees.
Capital in SMAs grew 27% year-over-year, a recent Goldman Sachs report notes, with nearly one out of every five allocators utilizing the structure. Allocators are using young managers’ lack of scale to their advantage, pushing for new launches and emerging funds to adopt the structure if they want capital.
The Goldman report notes that more than half of the capital in firms with less than $500 million in assets is now held in SMAs — up from 41% at the end of 2020.
Cisu is one of several launches from former Elliott investors in recent years, as BI has previously covered.
