May 13, 2020
CQS Spins Off Equity Hedge-Fund Arm as Hintze Goes Back to Roots
(Bloomberg) -- Billionaire Michael Hintze’s CQS is spinning off its nascent equities hedge-fund business into a stand-alone firm as it focuses on core credit strategies that have been hammered by the pandemic.
Paul Graham, the firm’s head of equities, will leave CQS to lead the spinoff as chief executive officer, according to people with knowledge of the matter. CQS will take an equity stake in the business and allocate some capital to it, said the people, asking not to be identified because the information is private.
The abrupt move comes after sharp losses at the firm’s main hedge funds in March amid the virus-fueled sell-off. Its long-short equities business hasn’t yet started a fund and the firm was recently looking to build out its share-trading offerings under plans initiated by former CEO Xavier Rolet.
Hintze is fighting to turn around poor performance at his credit-focused firm after some of its bets imploded this year. The CQS Directional Opportunities Fund that he personally manages lost about 17% last month, the people said, after shedding just over 33% in March. He also reshuffled his asset-backed securities team by appointing Jason Walker as sole chief investment officer of the strategy, after the money pool slumped a record 43.5% in March.
Roger Guy, who joined CQS’s equities business as a senior adviser and non-executive chair in January along with Graham, is also leaving to become chairman of the spun-off entity.
Andrew Billett, an equity hedge fund manager who recently joined the firm from Arrowgrass Capital Partners, is also leaving with his five-member team to be head of equities for the new company. Billett is expected to start a long-short equity fund with about $400 million for the firm, one of the people said.
London-based CQS, which manages about $16 billion, will continue running its long-only equities business.
Graham and a CQS spokesman declined to comment.
Graham, Guy and Billett’s team had joined CQS’s growing hedge fund platform this year as part of Rolet’s expansion plan. Rolet, the former CEO of the London Stock Exchange Group Plc, stepped down just a year after taking the role, citing “reasons unconnected with CQS.” Since then, a number of his hires have left.
Rolet to Step Down as CEO of Billionaire Hintze’s Hedge Fund
Deputy CEO Serge Harry, who joined the firm last year and looked after the firm’s legal and compliance, finance, and human resources departments, has stepped down. Ahmad Deek has also stepped down as head of data science and chief risk officer.
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