Walleye Capital Explained

Walleye Capital (Walleye) is an American multi-strategy hedge fund management firm headquartered in New York with additional offices outside the US in London and Dubai.

Background

In 2005, Walleye was originally set up as an options market making firm in Minnesota by Irving Kessler, Peter Goddard, and three others.^{[3] [4] [5]} Prior to this Kessler who was an experienced floor trader had founded Deephaven Capital Management.

The founders of Walleye intended for it to perform electronic trading that used data and fast computers to earn profits for its clients.^[6] Goddard oversaw the development of a system called Deephaven that enabled Walleye analysts to query large amounts of fast-moving data in real time which gave its clients competitive advantage.

According to Walleye's own disclosures, as a trading firm it has been fined multiple time for breach of regulatory rules.

In 2016, Goddard spun out Deephaven Data Labs as its own company to use the Deephaven system to solve data challenges in other ways.

In 2017, Walleye started accepting outside capital and restructured to become a hedge fund. Walleye changed its strategy with aims to shed its Midwestern image and become the best midsize multi-strategy platform. It limited capital managed so it could put more of its risk into its volatility and quant strategies.^[7]

In 2023, Walleye launched Dockside Platforms which connects investors to smaller Money Managers that charge lower fees and offer more liquidity and transparency. This was considered a method provide more options and chip away at the bargaining power that larger hedge funds held such as Citadel LLC, Millennium Management, LLC and Point72 Asset Management.^[8]

In March 2024, Walleye laid off 12 employees (4% of employees) as part of its restructuring process. In August 2024, Walleye laid off a further 12 employees and closed its office in Houston.^[9] In October 2024, further cuts were made with 8 traders leaving the firm.^[10]

Notes and References

1. Web site: Form ADV . SEC . September 10, 2024 . January 10, 2024 . https://web.archive.org/web/20240110113907/https://reports.adviserinfo.sec.gov/reports/ADV/161413/PDF/161413.pdf . live .
2. Web site: Walleye Trading LLC . FINRA . September 10, 2024 . September 10, 2024 . https://web.archive.org/web/20240910130518/https://files.brokercheck.finra.org/firm/firm_136196.pdf . live .
3. Web site: Bison Advisors LLC v. Kessler, Civil No. 14-3121(DSD/SER) Casetext Search + Citator . September 10, 2024 . casetext.com . September 3, 2020 . https://web.archive.org/web/20200903235314/https://casetext.com/case/bison-advisors-llc-v-irvin-kessler-peter-goddard-walleye-trading-advisors-llc-1 . live .
4. Web site: Irvin Kessler, Principal / Chairman . Provident Real Estate Ventures.
5. News: Kumar . Devika Krishna . March 14, 2024 . Hedge Fund Walleye Eliminates a Dozen People in Restructuring . September 10, 2024 . Bloomberg.com . en . March 22, 2024 . https://web.archive.org/web/20240322064049/https://www.bloomberg.com/news/articles/2024-03-14/hedge-fund-walleye-eliminates-a-dozen-people-in-restructuring . live .
6. Web site: Woodie . Alex . August 19, 2021 . From Wall Street to Main Street: Inside Deephaven's Big Data Journey . September 10, 2024 . Datanami . July 1, 2022 . https://web.archive.org/web/20220701234719/https://www.datanami.com/2021/08/19/from-wall-street-to-main-street-inside-deephavens-big-data-journey/ . live .
7. Web site: Saacks . Bradley . December 18, 2023 . How under-the-radar multi-manager hedge funds are balancing their ambitions — and avoiding becoming the next Schonfeld . September 10, 2024 . Business Insider . en-US . August 19, 2024 . https://web.archive.org/web/20240819103838/https://www.businessinsider.com/how-multi-strategy-firms-are-balancing-growth-investor-demand-2023-12 . live .
8. Web site: Saacks . Bradley . August 2, 2023 . The new platform giving big hedge funds a run for their money . Semafor . September 10, 2024 . April 16, 2024 . https://web.archive.org/web/20240416150200/https://www.semafor.com/article/08/01/2023/the-new-platform-giving-big-hedge-funds-a-run-for-their-money . live .
9. News: Tan . Gillian . August 5, 2024 . Hedge Fund Walleye Dismisses a Dozen Staff, Including Equity Capital Markets Head . September 10, 2024 . Bloomberg.com . en . September 10, 2024 . https://web.archive.org/web/20240910130522/https://www.bloomberg.com/news/articles/2024-08-05/hedge-fund-walleye-dismisses-a-dozen-staff-including-ecm-head . live .
10. News: Shaw . William . 2024-10-29 . Walleye Cuts Five Traders Including Global Macro Head Anuraj Dua . 2024-11-02 . Bloomberg News . en.