Israel Englander isn't used to getting blindsided.
But on the morning of Jan. 3, Mr. Englander, the billionaire founder of Millennium Management, was caught off guard in his eighth floor offices on Fifth Avenue when his top lieutenant and potential successor abruptly resigned.
The reason was as old as they come in the hedge fund game. After eight years, Michael Gelband, a hot shot in fixed income, wanted to be more than an employee at Mr. Englander's wildly successful hedge fund. He wanted a stake.
Mr. Englander, 68, known as Izzy, now finds himself where he's spent much of his career: alone at the top. His $34.4 billion empire, built out of scores of separate trading teams, remains solely in his control and without an anointed successor.
The question for Englander's 2,100 employees and his deep-pocketed investors is whether Millennium can move out of its founder's shadow. Mr. Gelband's looming departure has set the industry abuzz. Outsiders, and many insiders, are asking what exactly is going on at Millennium.
The answer, according to people close to the firm, is that Mr. Englander didn't share ownership. A Brooklyn native with a no-nonsense demeanor, Mr. Englander is famous for his eat-what-you-kill ethos. Make money, and you get rich. Lose money, and you're out — fast. He's placed his traders in about 175 silos, each with a different market strategy. Few of them get to see the big picture, a setup that makes managing Millennium a challenge but also keeps the teams focused.