Guggenheim Partners Cuts Eight Senior Employees

Jan 12 2015 | 7:58am ET

The hits against the hedge fund industry keep coming in the New Year. This time, the Purchase, New York-based Guggenheim Partners is letting go of portfolio managers and marketing leadership.

After the hedge-fund arm of Guggenheim Global Trading (GGT) failed to deliver expected returns, the $220 billion firm let go of eight senior employees in December, according to multiple reports.

Lackluster performance and struggles to recruit new clients hurt the unit led by industry veterans Patrick Hughes and Loren Katzovitz. Now, rumors are circling that Guggenheim could offload the unit by selling its majority stake. 

The fund was launched in 2011 with goals of raising $2 billion and expanding its client base. But the results didn’t follow.

According to CNBC, the company’s main fund, GGT Multi-Strategy slid 5% in 2014 through November. The company’s performance lagged against its benchmarks for similar funds since 2012, according to an analysis of company marketing collateral and the Absolute Return Multi-Strategy Index.

In 2012, GGT Multi-Strategy gained 3.19% (from February to December), against a benchmark of 8.66%.

In 2013, the fund closed up 7.14%, but trailed its benchmark of 10.62%.

And in 2014, it struggled to keep up with the benchmark level of 5.06% in 2014.

In late 2014, the firm had 14 portfolio management teams with 18 traders, according to a source close to the firm. Most of the staff were based in in Purchase, with a small number working out of an office in Zug, Switzerland.

According to the source, the total employee count was under 70, and most of the headcount was staff, including legal, compliance, back office and administration.

The firm let go of seven portfolio managers and its top marketing official.

*Correction: An earlier version of the article incorrectly stated the number of traders and employees at the firm.

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