(Bloomberg) -- Ilex Capital Partners, one of last year’s biggest hedge fund startups, is preparing to raise fresh capital by the end of this year.
Led by former Citadel traders Jonas Diedrich and Dave Sutton, the London-based firm is in talks with clients to open the fund to an additional $1.5 billion, people with knowledge of the matter said.
The firm intends to raise the cash from existing investors, according to the people, who asked not to be identified because the details are private. Ilex, which stopped taking money a few months after opening to external cash on July 1 last year, manages about $2.36 billion, one person said.
Diedrich’s equity long/short, market-neutral and factor-constrained strategy at Ilex — similar to the one he ran at Citadel — returned 10.4% during the first 12 months of managing external capital and 6.6% in the first half of this year, the people said. That compares with the 8% gains made by equity hedge funds tracked by Bloomberg in the six months through June.
A representative for the investment firm declined to comment.
With a focus on European securities, Ilex currently has multiple trading books run by portfolio managers specializing in consumer staples, consumer discretionary, health care, industrials and financial-sector stocks.
While hedge funds broadly have been facing withdrawals, firms that typically field several teams of traders across various asset classes have been drawing capital. The industry suffered $40.6 billion in outflows through April this year, according to data compiled by eVestment. Yet Bobby Jain and Diego Megia have collectively raised more than $10 billion for their hedge fund startups this year.
Ilex raised its initial capital from investors including Woodline Partners, which brought in $500 million. It was among the biggest hedge fund startups in 2023 along with Mala Gaonkar’s SurgoCap Partners that started with $1.8 billion, and a $3 billion spin-out by a group of Moore Capital Management traders led by Joeri Jacobs.
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