In the hedge fund business, leaving home usually means leaving with nothing but a track record, a Rolodex and a lease on a sublet floor in the Flatiron District. Xantium intends to leave with about $9 billion.
The quantitative fund, which has operated inside Tudor Investment Corporation since 2019, plans to spin out as an independent firm in the first half of 2027, the Financial Times reported, citing people familiar with the plans. According to Hedgeweek and HedgeCo, which followed the FT’s report, most of Xantium’s capital comes from outside investors, with the rest supplied by Tudor, Xantium’s leadership and some employees. Tudor is expected to back the launch, though it is not yet clear whether Paul Tudor Jones‘s firm will keep an equity stake.
If the plan holds, Xantium would claim the record for the largest hedge fund spinout. The current titleholder is Leda Braga’s Systematica Investments, which separated from Michael Platt’s BlueCrest Capital Management in 2015 with $8.4 billion. The more recent benchmark is Diego Megia’s Taula Capital, which opened with roughly $5 billion in 2024 after Megia left Millennium Management.
What Xantium is
Xantium was founded inside Tudor by Oliver Watson and Sergey Levin, both formerly senior quantitative specialists at D.E. Shaw, the New York firm that has produced more than its share of quant founders. It runs a single multi-asset fund trading equities, commodities, fixed income and currencies. The approach blends systematic models with discretionary decisions, though computer-driven strategies account for most of the portfolio’s risk.
The firm employs about 300 people, according to the reports, and keeps offices in London, New York, Salt Lake City and Abu Dhabi. That last pairing is telling. Salt Lake City has become a quiet back-office and engineering hub for Wall Street firms looking for talent outside the coastal cost structure, and Abu Dhabi has spent the past several years courting hedge funds with licenses, office space and the gravitational pull of its sovereign wealth.
Why spin out now
On paper, the timing is awkward. Independent launches have rarely been harder. Legal, technology and compliance costs have climbed, and the multistrategy giants, chief among them Citadel and Millennium, have spent years paying almost any price for portfolio managers who can generate uncorrelated returns. A new firm has to hire against those checkbooks.
But Xantium is not a typical launch. It arrives with a live track record, an established investor base and, crucially, infrastructure that already exists. Three hundred employees across four cities is not a start-up; it is a mid-sized asset manager changing its letterhead. The hard part of most launches, raising day-one capital and building the plumbing, is largely done.
For investors, the appeal of a spinout is straightforward. They can keep exposure to a team they already know while getting a cleaner governance structure, a direct relationship with the people running the money and, often, a more transparent fee arrangement than a fund-within-a-fund. For the founders, independence means owning the franchise outright and keeping more of the economics, which in quant investing is no small thing, since a strategy’s value grows with the capacity it can carry.
What it means for Tudor
For Tudor, the calculus is more delicate. The firm Jones founded in 1980 made its name on macro trading, and Jones himself is among the most famous discretionary traders of his generation. Housing a large systematic unit gave the firm diversification at a time when quant strategies have attracted a growing share of institutional allocations. Letting that unit walk out the door with $9 billion of largely outside capital will shrink Tudor’s own asset base, unless it keeps a meaningful ownership stake or revenue share in the new business.
Big-name firms have handled these departures in different ways. BlueCrest’s separation from Systematica was built as an orderly handover, with the systematic business taking its investors and its team. Millennium, by contrast, lost Megia to a fully independent launch. If Tudor retains a stake in Xantium, it would be following the more collaborative template, the one in which the parent keeps a share of the upside and the child gets a friendly anchor investor.
The New York angle
Xantium’s New York office puts it in a market that remains the center of gravity for hedge fund hiring. Quant talent in the New York area is spread across D.E. Shaw, Two Sigma, Renaissance’s Long Island headquarters and the trading floors of the multistrategy platforms, and the recruiting war for researchers and engineers has only intensified as artificial intelligence has turned data science into a seller’s market.
A $9 billion independent shop with a single flagship fund would be a meaningful new bidder in that market. It would also be one more data point for allocators who have spent the past few years asking whether the age of the giant multi-manager platform has room for a different kind of firm: concentrated, systematic and owned by the people who built it.
For now, the details that matter most to investors, including fees, liquidity terms, the shape of any Tudor stake and the exact launch date, remain unannounced. The industry will be watching the first half of 2027 closely. Records in this business tend to be set quietly, in subscription documents, long before they make the papers.
Featured image: Paul Tudor Jones, founder of Tudor Investment Corp., in 2006. Photo: U.S. Department of the Interior (Tami Heilemann) via Wikimedia Commons, public domain.
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