Jain Hedge Fund Costs Cut Into $750 Million Profits Last Year

(Bloomberg) -- Running a multistrategy hedge fund is expensive. Building one from scratch is even more so. 

Bobby Jain’s hedge fund, the latest entrant into the booming market, made hundreds of millions of dollars in profits last year but most of it went to paying for the investment firm’s front-loaded expenses as the industry veteran gradually deployed $5.3 billion he raised in 2024.

His multistrategy investment firm, Jain Global, generated about $750 million in trading profits last year — but investors shared only about a quarter of the gains after accounting for fees and expenses, according to people with knowledge of the matter. That means gross returns in the mid-teens shrank to about a net 3.7% gain for backers, said the people, asking not to be identified because the information is private.

Multistrategy funds are already the most expensive among peers because they pass on all costs to investors. That setup is particularly brutal in a launch year, where a partially deployed pool of capital carries the full cost base of a new operation. Industry studies have shown clients keep about 40% of profits at established multistrategy funds.

Jain Global is a test case for the pricey hedge fund model and whether newcomers can carve out a space for themselves in a world dominated by the likes of Citadel and Millennium Management, which took decades to transform themselves into investment giants trading across assets and continents.

Rather than building gradually, investors backed Jain’s launch as a fully fledged platform from day one — a high-cost approach that has put immediate pressure on performance. Assets raised have been deployed slowly, which has impacted his fund’s returns because costs chipped away a good chunk of the profits generated.

“What allocators appreciate is that it’s a business that takes some time to build and it’s expensive,” Marlin Naidoo, global head of capital introduction at BNP Paribas SA, said talking generally about the industry. “There is a willingness to invest in that — building today to win tomorrow.” 

Jain Global started last year with about $2 billion deployed and ended with about $5 billion invested across 50 trading teams, the people said.  

Among the firm’s most successful money managers were equities portfolio managers Townie Wells and Mike Scheer, the people said. Syril Pathmanathan, who focuses on bank capital relief trades, precious metals trader Amir Ravan and macro trader Ali Rauf were also among the biggest contributors, the people added. 

A representative for the firm declined to comment. 

Jain, the former co-chief investment officer of Izzy Englander’s Millennium, set out on his own in 2024 and opened a hedge fund trading about a half-dozen strategies and employing hundreds of people globally from day one. Jain himself has likened the task to trying to landing three airplanes at once.

Jain’s Millennium alumnus Michael Gelband, who is credited with starting the biggest-ever hedge fund with $8 billion in 2018, initially mostly made single-digit yearly returns. But his ExodusPoint Capital Management has now produced back-to-back double-digit gains from its predominantly fixed income-focused strategy.

Client Support

Jain’s clients understood it was going to be an expensive venture initially, but still supported his unprecedented launch plan, forking over billions to make his one of the largest hedge fund launches in history.

His timing also helped. The industry’s biggest players, such as Citadel, Millennium and D.E. Shaw & Co., have either stopped raising new money actively or have even returned cash over the years. Some assets looking for a new home have found their way into startups like Jain and other multistrategy investment firms.

Raising cash is only half the battle. Far harder is deploying it safely and effectively, especially for a fledgling operation where capital protection is a priority. Building teams has been slowed by longer non-competes imposed by rivals, while choppy markets have made managers more cautious about putting capital to work. In the meantime, investors have to keep paying the passthrough fees that the multistrategy firms charge to pay for their tech, infrastructure and traders. 

“Headcount, systems and offices scale much faster than alpha does,” Bruno Schneller, managing partner at multifamily office Erlen Capital Management, said. “Once the teams are in, the systems are live and the capital is deployed, investors aren’t evaluating potential anymore. They’re evaluating results.”

More stories like this are available on bloomberg.com

©2026 Bloomberg L.P.