2024 was a marquee year for hedge fund startups, producing a hefty crop of pedigreed funds, including two of the largest launches ever: Jain Global and Taula Capital, both of which started with $5 billion or more in investor commitments.
The third-largest of that year, Freestone Grove, has cruised under the radar — even as it has doubled in size.
Freestone, an equities-focused multimanager fund launched by Citadel alums, now has more than 180 employees, according to a March filing with regulators, while assets have eclipsed $6 billion and are poised to grow further as the firm opens up to select investors this year, people with knowledge of the matter said. It started out with $3.5 billion and 90 employees — in normal years, plenty enough to secure the “largest launch” title.
In terms of investor capital, it has now eclipsed Jain, the buzziest launch in recent memory, which manages about $5.9 billion in assets, Business Insider has learned. (Taula now manages more than $8.5 billion after a recent fundraise, Bloomberg reported.)
Freestone posted gains of 11% and 8.5% in 2024 and 2025, respectively, according to people familiar with the figures and LP investment documents. Like many of its peers, the fund is in the red in 2026, down 3% through March, the people said, asking not to be named discussing private information.
It’s also planning to raise more capital and grow its ranks. Freestone plans to add teams to each of its coverage areas, with the eventual goal of having two to three teams per sector, according to a person familiar with the plans.
A Freestone spokesman declined to comment.
‘The anti-pod’ hedge fund
Each of the three giants of 2024 opted for the most en vogue hedge fund structure — multiple portfolio managers making bets and most, if not all, expenses directly passed on to investors — but each came in a different flavor. Jain adopted the multistrategy pod model used by firms like Millennium, Balyasny, and Schonfeld, where specialized teams run money, while Taula concentrated on fixed income and macro strategies.
Freestone, meanwhile, marketed itself to investors as the “anti-pod” shop, with fewer money managers trading more capital. Risk-takers invest solely in equities and focus on narrower slices of the stock market; collaboration is standard, and quantitative processes are embedded throughout.
The approach more closely resembles an equities division of Citadel, which is what founders Todd Barker and Daniel Morillo, former Citadel leaders, intended to replicate. Other equity-market-neutral hedge funds with similar styles include Holocene Advisors, Woodline Partners, and Alyeska Investment — all Citadel equities offshoots that aim to make money independent of broader market movements.
The multimanager challenge
What Jain, Taula, and Freestone all have in common, however, is a notoriously expensive hedge fund model — the multimanager structure — whose costs can quickly erode returns. Even at more mature firms, investor patience is all but requisite, with the best firms locking up capital for years. And large allocators have pushed back on costs in recent years amid a costly war for talent, pressing some firms for performance hurdles.
New funds launching with this model face an even more daunting challenge, given the additional startup costs of building the firm from scratch. Anchor investors typically receive discounted fees in exchange for committing for the long haul.
Jain’s performance has been poor thus far, with expenses eating away the majority of its gross performance. One investor, Singapore sovereign wealth fund GIC, is planning to redeem capital, Bloomberg reported. Taula made double-digit gains in its first full year of trading in 2025, but, like many other macro funds, suffered significant losses this March amid the war in Iran.
Trading equities — the broadest and most mature asset class, with friendlier prime-brokerage terms — is a different and somewhat less complicated animal by comparison.
Freestone got off to a strong start in its debut year, delivering double-digit gains. Its sophomore effort in 2025, however, trailed broad hedge fund indexes, a PivotalPath benchmark of equity-market-neutral funds, and more established peers like Alyeska, Holocene, and Woodline. (Firm representatives declined to comment or did not respond to requests for comment.)
The firm’s stability so far is a positive sign for investors, sources close to the firm told BI. Turnover among its original staff has been limited but includes its chief financial officer, head of data science, head of equity capital markets, and a handful of investment analysts. Most of the firm’s leadership and investment staff remain in place, including all six of its day-one sector heads — an encouraging sign for LPs given the steep cost of recruiting investment talent in a highly competitive market.
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