Multiple hedge funds reduce teams or return capital after tech stock selloff
Multi-strategy hedge fund Walleye Capital, which manages about $17 billion, posted a 5.9% loss in October, its worst monthly performance since March 2020. In a letter to investors, the company said it will streamline its internal long-short equity business, dismiss the head of that business, Anil Gondi, and most of the internal team, and plans to return some capital.
Systematic hedge fund Engineers Gate, after losing about 5.5% in October, cut most members of its Synthesis equities team, including head Mike Daylamani. The team previously accounted for about 14% of the company’s market capitalization, with a small number of fundamental portfolio managers remaining. The firm manages about $18 billion to $23 billion.
AI-themed hedge fund Situational Awareness, managed by Leopold Aschenbrenner, previously sold most of its public equity holdings to Citadel in July 2026 amid a pullback in AI stocks, reducing assets from a peak to about $10 billion. This was the second related event.
Original sources:
Title: Engineers Gate Cuts Most of Synthesis Stock Team After Performance Review
Publisher: Bloomberg
Publication date: 2026-11-05
URL: https://www.bloomberg.com/news/articles/2026-11-05/engineers-gate-parts-ways-with-most-of-synthesis-stock-team
Nature of source: financial media report
Verification status: report read, cross-checked against other media on Walleye and Situational Awareness
Supporting content: Engineers Gate layoffs, Walleye losses and team adjustments, Situational Awareness’s earlier asset decline
ABAB AI Insight
Both Walleye and Engineers Gate recorded monthly losses after the tech stock selloff and took measures to shrink internal equities teams or return capital. Walleye explicitly said the cost of building internal long-short capabilities had been too high.
Situational Awareness had previously reduced its size to about $10 billion by selling public holdings to Citadel. This synchronized adjustment by multiple firms to equity-related businesses occurred during a sharp pullback in tech stocks.
From a capital-allocation perspective, multi-strategy platforms faced performance pressure and team reductions after concentrating positions in tech stocks. Engineers Gate’s Synthesis team accounted for a limited share, while Walleye directly adjusted its internal structure and plans to return funds.
Structurally, this was an internal restructuring and risk reduction among hedge funds against the backdrop of a tech stock selloff. Public information shows team adjustments and capital returns, rather than a liquidation of the funds as a whole.
ABAB News · Cognitive Law
After a 5.9% monthly loss, Walleye cut its internal long-short team and plans to return capital.
Engineers Gate cut most of the Synthesis team, which previously accounted for about 14%.
Situational Awareness had previously sold most of its public holdings and reduced its size to about $10 billion.