BTG Hedge Fund Said Shutting Hong Kong Office, Losing CIO

  • The unit is shrinking its operations after assets slumped
  • Hedge fund hit by redemptions after arrest, release of Esteves

Grupo BTG Pactual’s hedge fund unit is shutting down its Hong Kong office as it shrinks its operations following a slump in assets under management, two people with knowledge of the matter said.

Antoine Estier, a former UBS Group AG fixed-income trader who led the hedge fund unit, will leave, the people said, asking not to be named as they were not authorized to speak on the matter. A spokeswoman for BTG declined to comment. Estier, the hedge fund’s chief investment officer, did not respond to messages and an e-mail seeking comment. Efinancialcareers reported last week that Estier would leave the firm.

BTG’s hedge fund unit has been hit by redemptions following the arrest and release of the investment bank’s billionaire founder Andre Esteves, who was accused of trying to obstruct a corruption investigation involving an oil company. The BTG Pactual GEMM Fund has seen assets drop to about $250 million, a person familiar with the matter said previously this month, from more than $4 billion in November.

The firm’s trading teams managed money from offices in New York, London, Brazil and Hong Kong, using macroeconomic analysis to bet across asset classes. The GEMM fund returned 16 percent annualized through January from its start in 2009, compared with a 1.9 percent increase in the HFRI Macro (Total) Index.

Benjamin Clerget will lead the GEMM fund’s London office, Bob Pearsall will manage the New York operations and Jose Zitelmann will be in charge of the money pool in Brazil, according to one of the people and an internal memo seen by Bloomberg News. All three will report to Steve Jacobs, head of international asset management at BTG Pactual, the memo said.

BTG has eliminated about 60 jobs, including 15 traders, at the hedge fund unit in London, Bloomberg News reported last week, citing two people familiar with the matter. About 15 traders remain employed in the U.K. capital, the people said at the time.

It is only closing down the hedge fund unit in Hong Kong, not the entire office in the Chinese city. BTG was approved to start asset-management operations in Hong Kong in August 2009 and also holds licenses to deal in and advise on securities, according to information posted on the website of the city’s Securities and Futures Commission.

Esteves has denied any wrongdoing through his lawyers and is now under house arrest in Sao Paulo. BTG has said it’s not part of the investigation.

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