Staff numbers have continued to fall at Michael Hintze’s hedge fund CQS, but 2016 was still a bumper year for pay at the firm. This year looks like being decidedly leaner.
CQS has just released its accounts for both the full year 2016, and the first quarter of 2017. After “streamlining” its operation over the past 18 months – or cutting around 50 employees – staff numbers have continued to fall.
The hedge fund had 144 people as at 31 March, according to the accounts, down from 160 at the end of 2016. Hintze told Reuters in December last year that CQS was cutting staff to deal with the tough conditions facing the hedge fund industry and that other firms should do the same.
Still, CQS’s staff cuts appear out of line with the amount it has been paying its staff. It shelled out £30.9m for its 160 employees in 2016, up from £20.6m in 2015, or an average of £193k per head. Its partners also received a hefty bump up in compensation, with an average payment of £3m, up from £1.55m the previous year. The member with the highest entitlement was paid an enormous £65m, compared to £11.2m the previous year.
This generosity has not continued into 2017. Partner pay for the first quarter was an average of £526k, suggesting 2017 will be a leaner year for senior employees, while total staff costs for the first three months were £3.6m.
Profits for the year in 2016 were £85.7m, a big increase from £35.8m in 2015. In the first quarter, CQS made £14.7m.
There have been some notable departures from CQS recently. Brian Schwartz, its head of client development for the Americas, has just joined BlackRock in New York, Marc Touboul, a senior credit analyst, joined Bain Capital’s liquid strategies division in June, while Greg Sadler, a partner and portfolio manager in its financials investment division, joined HSBC as head of financials trading.
As we reported in May, Nick Nassuphis, the former head of European equity exotics trading at both Barclays and Credit Suisse who joined CQS’s systematic trading division in January 2015 moved to Insight Investments as a portfolio manager.
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