Commerzbank has shuttered its US$1 billion fund of hedge fund business and laid off most of its staff.
The German bank had been trying to sell the unit, Commerzbank Alternative Investment Strategies, or Comas. But the firm instead abandoned the sale process, which was being run by Goldman Sachs, and had returned some 85% of its assets to investors by the end of last year, Financial News reports.
Commerzbank said it announced plans to pull the plug on Comas in July, but did not say why it decided against selling the 11-year-old unit. Comas managed US$1.5 billion in 2008, before the group was hit hard by the financial crisis. Prior to that, the unit had earned €38 million in pre-tax profits for Commerzbank over five years, although the profit had dropped from €12.5 million in 2004 to €2.4 million in 2008.
Comas has been left with a skeletal staff of operational employees to handle the winding down, which is expected to be completed in the next three months.