The last 18 months have been Paloma Partners’ second attempt at reinventing itself.
The first try began in May 2023. Billionaire Donald Sussman, the founder of the 44-year-old asset manager famous for seeding D.E. Shaw and other quant funds, decided his firm needed a shake-up and hired well-known investor Neil Chriss as the firm’s CEO. Less than a year later, however, Chriss was out, and the firm was facing significant redemptions as 2024 came to a close.
Now, with former Goldman Sachs partner and Credit Suisse executive Ravi Singh installed as CEO and longtime WorldQuant executive Mike DeAddio as COO, the $1.5 billion firm believes it can reestablish its reputation in the industry as a destination for top investors thanks to talent-friendly terms and rebuilt infrastructure.
“It’s been a hell of a year,” said Singh in a recent interview at the firm’s midtown Manhattan offices. Through the middle of December, Paloma had returned roughly 9% in 2025, a person close to the firm said, after gains of just 2.5% in 2024. The manager declined to comment on performance.
Paloma is looking to fundraise and diversify further beyond its systematic trading roots. Among the firm’s latest investments are Avicene Asset Management, a long-short equity fund launching in early 2026 from Moiz Khan, a former investor within Citadel’s Surveyor unit, and Jay Kaplan, an internal portfolio manager focused on IPOs. Singh said Paloma is “agnostic” about whether portfolio managers would run money internally on Paloma’s platform or externally at their own firms.
“We’re competing against everyone” for talent, Singh said, and Paloma has plans to get bigger in every facet.
Building on Paloma’s reputation
Despite the firm’s recent turbulence, the Paloma name still carries weight in the quant community.
“I always heard legendary stories about Paloma,” said JB Kim, the founder of quant fund nVerses, which manages capital from the firm. A backer of D.E. Shaw, Nassim Taleb’s now-shuttered Empirica Capital, and LMR, Sussman, in particular, is held in high esteem among the systematic community.
But Singh and DeAddio want talented PMs in other asset classes as well. The multistrategy fund aims to be split equally between fundamental stockpickers, systematic traders, and credit funds, Singh said, and the manager has also added a few volatility traders to diversify the return stream.
One of the firm’s best bets in recent years is London-based credit fund Sona Asset Management, which has surged to more than $15 billion in assets after originally launching with an SMA from Paloma.
Paloma Partners
Paloma’s top three executives, along with Sussman, who is now the chairman, make up the office of the CIO, and they’ve defined the type of investor they’re looking for as “established emerging managers.” Strategies that require years of work before they can begin trading, Singh said, are not wanted, but the firm is willing to be more flexible on risk than others in the industry.
“This model has supported a strong track record of successful launches and reinforced our reputation as a founder-friendly capital partner,” Singh said.
The investors they’re seeking are tired of one-size-fits-all platforms and often run more constrained strategies. Both internal PMs and external fund managers own their intellectual property and track record, Singh added.
‘High-touch’ talent strategy
As the $5 trillion hedge fund industry deals with an ongoing talent war, Singh said the model the firm has used to recruit and retain talented investors is “high-touch.” Paloma, he said, will likely never grow to be hundreds of investing teams like Millennium or Citadel — the firm doubled its investor head count in 2025 to roughly 25 portfolio managers — but can continue to add the right kind of investors for their model.
These PMs are likely more tenured in their careers and not looking to jump to whichever fund is offering the highest guaranteed payout at the time. Singh said the firm is keeping a close eye on costs and avoiding bidding wars for PMs.
Instead, the “high-touch” model is defined by a close working relationship with Singh, DeAddio, and the firm’s chief risk officer, Grant Rippetoe, that can be more customized to the individual PM.
Kim, the founder of nVerses, who started his firm in 2021 with capital from Millennium before Izzy Englander’s firm redeemed its money, said he communicates with DeAddio every day and was able to start trading four months after getting Paloma’s capital, a remarkably fast timeframe for a systematic strategy.
Ready to grow again
How big the firm grows its asset base is still undetermined. What is known is the ability of the firm’s current roster of investors to handle more capital.
“Our talent pipeline and embedded manager capacity is multiples of our current capital base,” Singh said.
Paloma could get as large as $4 billion without needing to add investing personnel, the person close to the firm said.
If the manager were to continue to add assets beyond that mark, the head count would likely need to expand, but Paloma’s leadership believes its newly built infrastructure is able to scale quickly and efficiently.
DeAddio said that more investing teams allow the capital efficiency of portfolio building to really shine because of the added diversification. In other words, the multistrategy style of investing is one where sufficient scale matters.
While plenty has changed in recent years about Paloma, including most of the staff now shifting to the firm’s Manhattan offices from its Greenwich headquarters, Sussman recently wrote to investors that plenty of core tenets are unchanged and will not be altered in the expansion.
“As we complete a comprehensive restructuring and modernize our technology stack, two foundational elements remain unchanged: our focus on risk-managed, uncorrelated return streams and our role as a preferred partner for exceptional talent,” he wrote.
“In a highly competitive landscape, we continue to attract top-tier managers who value institutional alignment and the ability to scale in a disciplined way.”
