BTG Hedge-Fund's Assets Said to Plummet to Below $500 Million

Assets managed by Grupo BTG Pactual’s main macro hedge fund fell about 88 percent since November, according to a person familiar with the matter, as investors redeemed money following the arrest and release of its billionaire founder.

The BTG Pactual GEMM Fund pool is now less than $500 million, compared with more than $4 billion in November, said the person, asking not to be identified because the information is private. The hedge fund, led by former UBS Group AG fixed-income trader Antoine Estier, employs about 70 traders and is considering firing a significant number of them, the person said. A spokesman for the hedge fund declined to comment.

Andre Esteves, BTG’s former chief executive officer and chairman, was arrested in late November and accused of trying to obstruct a corruption investigation involving oil company Petroleo Brasileiro SA. Esteves, who was released from jail last month and is now under house arrest in Sao Paulo, has denied any wrongdoing through his lawyers.

Grupo BTG Pactual was weighing separating the hedge-fund unit to ring fence it from the banking operations, people familiar with the matter said in January.

The fund, which follows economic trends to bet across asset classes, returned almost 9 percent in the 11 months through November, according to letters to investors seen by Bloomberg. It beat the near-zero return in the same period for the HFRI Macro (Total) Index.

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