A quantitative-focused hedge fund within the US investment firm Tudor plans to spin out as an independent entity early next year, managing approximately $9 billion in investor assets. The move is expected to be the largest hedge fund spinout on record, surpassing previous notable separations in the sector.
Xantium, which employs around 300 people, will depart from Tudor, the firm controlled by billionaire Paul Tudor Jones II, during the first half of 2026. The spinout will be capitalized with funds from its parent company, although it remains unclear whether Tudor will retain any equity stake following the separation. Tudor and Xantium declined to comment on the plans.
Currently, most of Xantium’s capital is third-party money, supplemented by investments from Tudor, the fund’s leadership, and some employees. The fund was established within Tudor in 2019 by partners Oliver Watson and Sergey Levin, both former senior quantitative analysts at US hedge fund DE Shaw. They are known for their expertise in computer-driven trading strategies that leverage data and mathematical models to forecast equity market behavior.
Xantium’s approach blends algorithmic trading with discretionary decision-making, with computer models taking the majority of risk. It operates a single fund that invests across multiple asset classes, including equities, commodities, bonds, and foreign exchange. The firm maintains offices in London, New York, Salt Lake City, and Abu Dhabi.
This planned spinout follows in the footsteps of other sizable hedge fund departures in recent years, such as Leda Braga’s Systematica, which separated from Michael Platt’s BlueCrest in 2015 with $8.4 billion in assets, and Diego Megia’s forthcoming Taula, launching in 2024 with $5 billion after leaving Millennium Management.
The decision to operate independently comes amid a challenging environment for hedge fund launches. Rising operational and legal expenses have increased barriers to entry, while large multi-manager hedge funds like Izzy Englander’s Millennium Management and Ken Griffin’s Citadel offer substantial financial incentives to attract top portfolio managers to remain under their umbrellas rather than strike out alone. Industry insiders note that new managers typically need to secure hundreds of millions in investor commitments before debuting to improve their prospects for success.
Tudor has a history of fostering new hedge fund ventures, with one of its most prominent successes being its early backing of Two Sigma, a quant fund now recognized as one of the largest in the world. The emergence of Xantium as an independent firm marks a notable development in the quantitative hedge fund landscape and reflects ongoing shifts in the sector's structure and dynamics.