Donald Sussman, the veteran investor behind Paloma Partners, is restructuring his long-running multistrategy hedge fund by cutting teams and concentrating on a smaller number of managers in whom he has the highest conviction. The move comes after the firm has seen its assets decline over the past three years, according to Bloomberg.
Paloma Partners has operated for decades as a multistrategy fund, a structure that spreads capital across numerous trading teams and approaches. The model became widely popular across the hedge fund industry, particularly as large players like Millennium Management and Citadel grew to manage hundreds of billions of dollars by deploying capital across dozens of independent pods. Paloma was among the earlier practitioners of the approach.
The pivot Sussman is now making runs in the opposite direction. Rather than maintaining a broad roster of trading teams, the firm will reduce its number of managers and concentrate resources where Sussman believes the probability of strong returns is greatest. The firm did not publicly detail which teams would be cut or what the revised asset base looks like following the restructuring.
The decision reflects a broader pressure facing multistrategy funds. After years of strong performance across the industry, several firms have faced tighter conditions as capital costs rise, talent competition remains fierce, and returns in some strategies have compressed. Funds that spread themselves across many teams must generate enough return from each pod to cover the cost of running the operation, and when assets fall, that math becomes harder to sustain.
Sussman has a long history in finance, and Paloma has navigated multiple market cycles since its founding. The current restructuring represents one of the more significant internal changes the firm has undertaken in recent years. Bloomberg reported the development on July 16, 2026.
