(Bloomberg) -- Millennium Management, the $35 billion hedge fund run by Israel ‘Izzy' Englander, hired Citigroup Inc.'s head of securitized markets, Mark Tsesarsky, to help run its fixed-income and commodities business.
Tsesarsky will co-head the group with John Anderson, according a letter to investors Monday from New York-based Millennium. Stephen Haratunian, chief credit officer at Credit Suisse Group AG's investment bank, will move to the fund as chief risk officer, Millennium said in the letter.
Tsesarsky is replacing Michael Gelband, Millennium's former bond chief and Englander's one-time potential successor who caught his boss off guard in January by abruptly resigning after eight years with plans to start his own hedge fund. While Millennium's assets have more than doubled in the past five years, the firm posted its second-worst performance in 2016 since starting almost three decades ago. Englander picked Credit Suisse veteran Bob Jain as co-chief investment officer last year.
“Our new heads of equities, risk and co-head of fixed income & commodities will join over the coming weeks,” Englander, 68, wrote in the investor letter. “Each bring significant institutional knowledge and domain expertise.”
Tripp Kyle, a spokesman for Millennium, declined to comment, as did Haratunian. Tsesarsky didn't immediately reply to a voice mail seeking comment.
For a story about Gelband's departure, click here
Anderson, Millennium's commodities chief, stepped in as interim head of fixed income after Gelband resigned. Millennium said in February it hired Morgan Stanley's Peter Santoro as global head of equities. He replaces Hyung Soon Lee, a longtime friend of Gelband's who left last year after a restructuring of the equities group.
Millennium returned about 2 percent in the first quarter, according to an investor document. That compares with a 2.5 percent gain by the Hedge Fund Research HFRI Fund Weighted Composite Index.
Tsesarsky, a refugee from Ukraine known as T-Man at Citigroup, started his career at Salomon Brothers as an agency pass-through trader and rose to become head of securitized products, a unit that trades some of the most complex products on Wall Street.
Securitized products contributed about $1.5 billion of Citigroup's revenue in 2016, according to people familiar with the matter. The New York-based lender was the world's second-biggest dealer in the instruments last year, when the overall industry generated about $9.6 billion in revenue, according to Coalition Development Ltd. data.
Tsesarsky's team rebuilt Citigroup into one of Wall Street's biggest dealers in collateralized debt obligations, the toxic instruments that almost led to the lender's collapse in the financial crisis. The group bought up billions of dollars of the products and then, in the three years ended in 2015, notched up almost $2 billion in revenue as their values rose.
“I hope to be able to announce our succession plan very shortly,” Paco Ybarra, global head of the bank's markets and securities services, said in an internal Citigroup memo on Tuesday.
Tsesarsky “was instrumental in the development, pricing and trading of a newly-created asset class and navigated the business through both buoyant and challenging times,” Ybarra said in the memo.
Read more about Tsesarsky: Finding gold in toxic assets
--With assistance from Saijel Kishan
To contact the reporters on this story: Dakin Campbell in New York at dcampbell27@bloomberg.net, Donal Griffin in London at dgriffin10@bloomberg.net, Nishant Kumar in London at nkumar173@bloomberg.net.
To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net, Steve Dickson, Margaret Collins
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