Walleye Capital, managing $17 billion in assets, has fired Anil Gondi, its head of equity long-short, and is cutting a "significant portion" of its internal stock-picking portfolio managers. The move follows an October loss of 5.9% — the fund's worst monthly performance since March 2020. Gondi joined Walleye in July 2025 from Balyasny Asset Management, where he had been a long-tenured stock-picking PM, and had also founded his own firm, 6elm Capital. His tenure lasted roughly 16 months. CEO and CIO Will England told investors the firm is "streamlining" its internal equity long-short business and examining "every facet" of the company. This is the second major departure from Walleye's stock-picking division this year. Matt Giannini, the unit's COO, left in September to return to Citadel. England's investor letter was unusually candid: "We invested significantly in improving the internal business, including bringing on a new leadership team. Those efforts did not yield the results we expected, and the opportunity cost and resources consumed were too high relative to the returns." Walleye isn't abandoning equities entirely. The remaining internal team will now report directly to England. The firm also plans to continue allocating to externally managed stock-picking funds and recruiting internal PMs. Recently, Walleye hired Anna Dev from Millennium to help source external opportunities. The firm has been investing in funds run by ex-Citadel traders, including Tommaso Trento's Benchstone Capital and Fifthdelta, managed by Niall O'Keeffe and Tio Charbaghi. The broader context matters. October was brutal for equity-heavy hedge funds across the board. Point72 and Schonfeld posted losses. Meta and Intel sell-offs drove volatility, the S&P 500 dropped about 1%, and Goldman Sachs data showed short-selling bets near a five-year high. This wasn't a Walleye-specific failure — but Walleye's response, gutting its leadership team and shrinking the unit, suggests the internal dysfunction ran deeper than one bad month. The multi-strategy hedge fund model — pod shops that hire and fire PM teams like interchangeable parts — is showing its structural tension. Walleye spent years and significant capital building an internal stock-picking capability, recruited a senior leader from a top competitor, and within 16 months concluded the entire effort was a net negative. The talent churn between Citadel, Balyasny, Millennium, and Walleye increasingly resembles a zero-sum game where the platforms pay escalating sign-on packages for teams that may or may not produce alpha, while the management infrastructure extracts fees regardless. England's pivot — centralizing equity reporting under himself while outsourcing stock-picking to external funds — is an admission that Walleye's comparative advantage lies in capital allocation and risk management, not in running an internal stock-picking shop. Whether that's honest self-assessment or a temporary retreat depends on what the next 12 months look like.
