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Hintze’s CQS Cuts at Least 50 Jobs as Hedge Fund Retrenches

Nishant Kumar, Nabila Ahmed and Alastair Marsh

(Bloomberg) -- Hedge fund firm CQS has slashed at least 50 jobs in an overhaul, as billionaire founder Michael Hintze retrenches to focus on core credit trading strategies.

The cuts are mainly concentrated in sales and support areas, but have also affected trading teams focused on asset-backed securities, according to people with knowledge of the matter, who asked not to be identified because the information is private.

CQS is seeking to reduce costs following a slump in high-fee earning hedge fund assets, the people said. The firm employed more than 280 people globally at the start of December, according to a letter to investors seen by Bloomberg.

A spokesman for the London-based money manager declined to comment.

While CQS still manages $17 billion, up from about $15 billion in March, its share of lucrative hedge fund assets has shrunk to about a third of the money managed by the firm, down from around half last year. That’s putting pressure on revenues.

The CQS Directional Opportunities strategy, run by Hintze himself, is facing redemptions after losing 33% in March and another 17% in April, according to people familiar with the matter.

The ABS trading team, which lost a record 43.5% in March, has undergone cuts and the firm is also trying to claw back deferred compensation payments from some of the staff, one of the people said. The team was rejigged after the losses. Jason Walker, previously co-chief investment officer of the strategy, took over as sole CIO and William Murray, who had shared the position, was made a senior portfolio manager.

Billionaire Hintze’s Hedge Fund Rocked by Pandemic Losses

CQS, which has been a bastion of money-making for about two decades, is experiencing a reversal in fortunes. Two of its hedge funds suffered their worst-ever losses during the market turmoil in March, while the firm has abandoned an expansion plan and former chief executive Xavier Rolet recently left after just a year with the firm, without any explanation.

Since Rolet stepped down in January, the majority of his hires including Deputy Chief Executive Officer Serge Harry and Ahmad Deek, head of data science and chief risk officer, have departed. The firm has also retreated from its planned expansion into an equity long-short strategy, with the team that was hired instead spinning out to set up their own firm.

Hintze, a former Australian army captain who began his investing career at Salomon Brothers in 1982, started CQS in 1999. The firm has traditionally specialized in making bets on credit markets from offices in London, New York, Hong Kong and Sydney.

(Updates with hedge fund assets drop in 5th paragraph.)

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