ExodusPoint Capital Management shook up the largest — mostly tech — holdings in its U.S. stock portfolio in the second quarter.
The multistrategy fund headed by two ex–Millennium Management honchos cut its stake in chip giant Nvidia — a Magnificent Seven stock — by about 55 percent, to a little more than 2.75 million shares, according to its second-quarter 13F document, made public on Tuesday. The stock, however, remains the hedge fund firm’s largest U.S. common stock long position.
At the same time, ExodusPoint established an large position in Nvidia “put” options as a hedge. Nvidia became ExodusPoint’s largest common stock long position at the end of the first quarter when the firm increased its stake fivefold.
In addition, ExodusPoint made big purchases of two other Magnificent Seven stocks in the second quarter. It nearly quintupled its stake in Amazon, to more than 1.5 million shares. Amazon is now ExodusPoint’s second-largest U.S. common stock long position. Again as a hedge, ExodusPoint bought a large number of Amazon “put” options. It previously had a very small position. And ExodusPoint more than doubled its number of shares of Apple, making it the firm’s fourth-largest U.S- listed common stock long position.
In the second quarter, ExodusPoint also made a significant purchase of a non–tech-oriented company, increasing its stake in ConocoPhillips by more than 600 percent, making it the firm’s sixth-largest U.S. common stock long position.
The firm made other big long bets on the stock market in general. It added to its major position in the “call” options of the SPDR S&P 500 ETF Trust, an exchange-traded fund designed to track the S&P 500 stock market index. It also has a sizable offsetting position in the “put” options of the ETF.
At the same time, the hedge fund firm sold most of its shares of Facebook parent Meta Platforms, which had been its second-largest U.S. common stock long at the end of the first quarter. And ExodusPoint reduced by a third its “call” options on the Invesco QQQ Trust, which tracks the Nasdaq 100 index. It also sold 96 percent of its “put” options on the ETF.
ExodusPoint could use a shakeup. Its main multistrategy hedge fund was up just 3.6 percent for the year through July, trailing most of its peers. However, most of the multistrat funds this year rose only by single digits through the first seven months.
ExodusPoint was founded in 2017 by Millennium’s Michael Gelband, then global head of fixed income, and Hyung Lee, then global head of equities. It was up 7.34 percent in 2023. The firm managed $12 billion at the beginning of 2024.
It emphasizes fixed-income strategies such as rates, credit and emerging markets, and macro as well as equities — statistical arbitrage, quantitative/event arbitrage, and equity long-short, which are typically market- and sector-neutral. Equities, however, are not a major part of ExodusPoint’s capital. Fixed income represents the bulk of the firm’s assets, according to a knowledgeable source.
Like many multistrat firms, ExodusPoint is managed by a large number of teams of portfolio managers, several of which may buy or sell the same securities at the same time.