BTG Hedge Fund Unit Said to Cut 60 Jobs After Assets Decline

Grupo BTG Pactual eliminated about 60 jobs at its hedge fund unit in London after assets under management slumped following the arrest and release of the investment bank’s billionaire founder, according to two people familiar with the decision.

The job cuts include about 15 traders in London, the people said, asking not to be named because the information is private. The traders are from the emerging and developed markets and rates units, while the others are in the back-office, middle-office and marketing divisions, one of the people said. About 15 traders remain employed in London, the person said. BTG Pactual did not reply to a request for comment.

The BTG Pactual GEMM Fund has seen assets drop to about $250 million, a person familiar with the matter said earlier this month, from more than $4 billion in November. Investors redeemed money following the arrest and release of BTG Pactual’s billionaire founder Andre Esteves, who was accused of trying to obstruct a corruption investigation involving an oil company.

The hedge fund, led by former UBS Group AG fixed-income trader Antoine Estier, had employed about 70 traders globally betting across asset classes based on economic trends. It returned 16 percent annualized through January from its start in 2009, compared with a 1.9 percent increase in the HFRI Macro (Total) Index.

A spokesman for BTG said earlier this month that a consultation process about cutting headcount at the hedge fund will end in March and any workers affected will get enhanced severance packages.

Esteves, who has denied any wrongdoing through his lawyers, is now under house arrest in Sao Paulo.

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