Key Takeaways
- • Balyasny Asset Management is expected to begin 2019 with $7.3 billion in assets, down from $11.3 billion at the start of 2018, after a $4 billion decline from losses and client withdrawals, according to Bloomberg.
- • The Chicago-based hedge fund has cut 13 equity teams, about 40 investment professionals, and at least 125 employees, roughly one-fifth of its staff, with more reductions expected before year-end.
- • The firm had aggressively expanded in 2016 and 2017, and last year nearly doubled its London division and raised average salaries by 24% before market losses prompted the reversal.
- • Atlas Global fund fell 3.9% in November and its leveraged variant slipped 5.7%; year-to-date losses stand at 5.3% and 7.9%, respectively.
- • Founder Dimitry Balyasny says the firm has hired several investment professionals set to start in 2019 and expects performance to improve.
Summary
Balyasny Asset Management, the Chicago-based hedge fund led by founder Dimitry Balyasny, is cutting roughly one-fifth of its staff after a $4 billion decline in assets driven by investment losses and client withdrawals, according to Bloomberg. The firm opened 2018 with $11.3 billion under management and expects to start 2019 with $7.3 billion.
The reductions are substantial. The firm has eliminated 13 equity teams, representing about 40 investment professionals, and at least 125 employees are expected to leave, which represents about one-fifth of total staff. Additional departures are anticipated before the end of the year. Before the layoffs, the firm employed about 272 people across roughly 80 internal divisions, spanning strategies including credit, global macro, quantitative systematic and equity trading.
The cuts are unusual against the firm's recent trajectory. In 2016 and 2017, Balyasny was aggressively hiring experienced professionals from investment banks. Last year it nearly doubled the size of its London division and raised average salaries by 24%. London-based staff have since departed, some voluntarily and most not, and Bloomberg reports that recent equity market shocks, which generated the largest losses for the firm in 2018, have prompted further exits.
Performance has weighed on results. In November, the Atlas Global fund dropped 3.9% and its leveraged variant fell 5.7%. Year-to-date losses stand at 5.3% for Atlas and 7.9% for the leveraged version.
Despite the retrenchment, Balyasny remains optimistic. The firm has hired several investment professionals scheduled to start in 2019, and Bloomberg reports that Balyasny expects performance to improve despite the loss of capital.
The reductions are substantial. The firm has eliminated 13 equity teams, representing about 40 investment professionals, and at least 125 employees are expected to leave, which represents about one-fifth of total staff. Additional departures are anticipated before the end of the year. Before the layoffs, the firm employed about 272 people across roughly 80 internal divisions, spanning strategies including credit, global macro, quantitative systematic and equity trading.
The cuts are unusual against the firm's recent trajectory. In 2016 and 2017, Balyasny was aggressively hiring experienced professionals from investment banks. Last year it nearly doubled the size of its London division and raised average salaries by 24%. London-based staff have since departed, some voluntarily and most not, and Bloomberg reports that recent equity market shocks, which generated the largest losses for the firm in 2018, have prompted further exits.
Performance has weighed on results. In November, the Atlas Global fund dropped 3.9% and its leveraged variant fell 5.7%. Year-to-date losses stand at 5.3% for Atlas and 7.9% for the leveraged version.
Despite the retrenchment, Balyasny remains optimistic. The firm has hired several investment professionals scheduled to start in 2019, and Bloomberg reports that Balyasny expects performance to improve despite the loss of capital.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.