Hedge fund Walleye will lay off a large number of long-short equity teams and return part of the capital

According to a letter to investors from Walleye Capital, the hedge fund will streamline its internal long/short equity business, replace the leadership of this business along with a significant portion of the investment team, and plans to return some capital to investors, with specific amounts, timing, and methods to be announced separately.

Walleye lost 5.9% in October, marking its worst monthly performance since March 2020. The company stated that the internal long/short equity business has performed the weakest since 2023, and will subsequently focus more on volatility, quantitative, and external management strategies, but will still retain stock investments through external managers and high-conviction internal managers.

The financial research community Special Situations also summarized that internal teams from Axebrook, Engineers Gate, Lone Pine, Millennium, and Verition, along with Samlyn, have experienced liquidations, large redemptions, or team adjustments this week. Some of this information has not yet been officially confirmed and should not be interpreted as all related funds having been liquidated.