The mastermind behind the Millennium team making billions wagering on shifts in stock indexes

Welcome back to Insider Weekly! I’m Matt Turner, editor in chief of business at Insider.

You won’t see Glen Scheinberg on CNBC or mentioned in the finance press.

But the 35-year-old portfolio manager, now residing in the cushy Dorado Beach neighborhood outside of San Juan, Puerto Rico, has quietly minted billions of dollars in returns for his hedge fund employer Millennium. 

He’s done it by supercharging a strategy known as index-rebalance trading, or betting on shifts in the companies included in indexes like the S&P 500 and Nasdaq. 

This kind of trading has been around for decades. But as Alex Morrell reported this week, the boom in passive investing, which has seen trillions of capital move to tracking indexes, has made it one of the hottest hedge fund strategies of recent years.

And no one has done it better than Scheinberg and his team, known by their initials: SRBL. 

Read on for a Q&A with Alex for more. 

Also in this week’s newsletter:

The Federal Reserve is about to pop the “everything bubble.”We outlined 43 enterprise-tech startups to bet your career on. We read Leon Black’s 59-page case against Josh Harris to find the biggest takeaways.  

Let me know what you think of all our stories at mturner@insider.com.

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The secretive hedge fund strategy that’s raked in billions

Insider correspondent Alex Morrell takes us behind the scenes of his reporting:

What prompted you to look into Millennium’s success?

I kept hearing tidbits about the intense hiring at hedge funds for “index-rebalance traders” — a specialty I knew little about, and to be honest, sounded kind of boring. This young Millennium portfolio manager I’d never heard of named Glen Scheinberg kept coming up in conversations as being the best in the world at it. When I heard this little-known trader and his team were making billions and ranking among the fund’s top performers, that really caught my attention. 

What’s one thing you’d like readers to take away from this piece?

Finance is chock full of intrigue and drama, and there are plenty of personalities willing to shout about how great they are and court media attention. But often the most brilliant, profitable, and interesting traders are operating under the radar, content keeping a low profile. That an obscure Millennium portfolio manager — who had sparse personal information in the public domain — was making billions while hiding in plain sight struck me. And there are more people out there like him. 

Where do you see this trend going in the next few years?

From the people I spoke with, it sounds like there’s still room to grow — especially with index funds and ETFs continuing to flourish — but it is getting very crowded very quickly. That means more competition and likely a tougher time making money from the strategy. As one of the portfolio managers who has been involved in index arbitrage for a while put it, “There are a lot of tourists in this strategy.”

Read the full story here: Millennium has quietly minted billions off of America’s passive-investing craze. Now rivals are racing to catch up.

The Federal Reserve is about to pop the “everything bubble”

For the past 12 years, the Federal Reserve has been pumping extraordinary amounts of money into the banking system in an attempt to boost the economy. But now, inflation is forcing the Fed to tighten the money supply, and burst the bubbles it’s created. 

The result will be a reordering of the economic system and chaos in the stock market — and average Americans losing out. 

What happens when the “everything bubble” pops.

Bet your career on these 43 enterprise-tech startups

From left: Ironclad CEO Jason Boehmig, Tope Awotona, the founder and CEO of Calendly, and Sara Menker, Gro Intelligence’s founder and CEO Melanie Fellay, Spekit CEO.

Demanding more ownership of their careers, some workers are choosing startups over established tech giants — but joining an up-and-coming firm can be risky, even in a relatively stable field like enterprise tech. To help navigate the industry, we’ve compiled a list of top startups worth joining this year. 

We evaluated the startups based on funding, leadership, and other criteria to determine which ones — from podcast-tech company Riverside.fm to sexual-harassment training startup Ethena — are worth betting your career on.

See our list of stand-out startups here.

We dug into Leon Black’s 59-page case against Josh Harris

Leon Black, cofounder of Apollo Global Management, has accused his former business partner Josh Harris of plotting a conspiracy against him. Black’s claims come after an investigation into his relationship with convicted sex offender Jeffrey Epstein, and after Guzel Ganieva, a former Russian model, accused him of sexual assault.

In his filing, Black claims Harris had a “war council” of Apollo staff, law firms, and publicists to oust him — and that Ganieva is secretly conspiring with Harris to take him down.

Everything we learned from the court filing.

More of this week’s top reads:

We break down how “hustle culture” got America hooked on work. Mark Zuckerberg’s lawyers revealed the name of an employee who’s accusing one of his former aides of sexual assault. Elon Musk’s relationship with China points to a dark future for Tesla. As tech stocks take a hit, investors are bracing for Nasdaq sell-off to hit startup valuations. Thanks to an accounting mistake, Better employees must repay hundreds of dollars — just the latest in a string of mishaps for the company. It’s been a year since retail traders piled into stocks like GameStop. We dove into how it’s changed the way Wall Street does business.A therapist for crypto addicts shares how to recognize the signs. 

Compiled with help from Jordan Parker Erb.

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