(Bloomberg) -- Billionaire Michael Hintze has abandoned his dream of becoming an asset-management powerhouse — at least for now. 

The CQS founder is relinquishing his prized hedge-fund brand and the vast majority of his credit-focused firm to Manulife Investment Management, a unit of Canadian insurer Manulife Financial Corp., the firms said Wednesday. 

He’ll launch a new firm to run his flagship hedge fund, which reported double-digit losses in 2020. Since then, its assets under management have declined by more than half.

The move underscores pressures on hedge fund managers — even veterans like Hintze — to grow in a world increasingly dominated by multistrategy giants that tend to charge higher fees and pay top dollar for talent. It also caps a long and slow decline for what was once one of the highest-flying hedge fund firms.

A representative for Hintze, 70, declined to comment.

Hedge fund firms need to “achieve scale and diversification to remain competitive and resilient,” Bruno Schneller, managing director at INVICO Asset Management AG, said in an interview, adding that the deal is a “clear indicator” of consolidation in asset management.

Manulife is acquiring the CQS credit platform, which has about $13.5 billion of assets under management, and the CQS brand, in a deal that’s expected to close in early 2024. Terms of the sale weren’t disclosed.

Read More: Michael Hintze Sells CQS to Manulife, Will Start New Firm

CQS’s fortunes changed after steep losses in some of its funds in 2020. Since then, the firm has shuttered at least two money pools, scuttled an expansion plan, spun off non-core strategies and cut jobs to return to its credit-investing roots. Assets have declined from peak of almost $20 billion before the losses.

Over the years, dozens of people have departed CQS, including Hintze’s longtime friend and former London Stock Exchange Group Plc head Xavier Rolet — who left within a year of joining the firm as its chief executive officer.

Hintze’s flagship fund reported a 35% loss in 2020 as his structured-credit bets imploded during the swings sparked by the Covid-19 pandemic. The fund manages about $1.2 billion, down from about $3 billion before the losses. It gained 21.5% in 2021 and 15.8% in 2022. 

The flagship fund was up about 9% through October, according to investor documents.

Hintze, a former Australian army captain, started trading Yankee bonds for Salomon Brothers in 1982 and joined Goldman Sachs Group Inc. two years later. He quit after he wasn’t made a partner. Brady Dougan, the former CEO of Credit Suisse, hired him and later gave Hintze $200 million to start his own hedge fund in 1999. Five years later, Hintze returned $500 million to Credit Suisse and took full control of CQS.

Even after the hit in 2020, the fund has generated about 11% annualized returns, with Hintze considered to be one of the best hedge fund managers in London. 

He’s “a powerful brand name” who delivered performance repeatedly, said Mario Unali, a senior money manager at Kairos Partners, who invests in hedge funds. “I expect investors to trust him with their assets in the new venture, too.”

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