Carlyle, Hedge Fund Firms Cut Heads

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Top-tier private equity firm the Carlyle Group continues to retrench. Now it's laying off about 100 people, or 10 percent of its workforce, and closing at least two offices.

The victims range from back-office staff to some of the firm's dealmakers, Investment Dealers' Digest reports on its Web site. Carlyle also is closing an office in Menlo Park, Calif., that opened less than 12 months ago. It recently closed a 10-person Warsaw office opened last year, and terminated a seven-member Asian leveraged finance group. In July, Carlyle was forced to shut a hedge fund group launched in 2007, Carlyle-Blue Wave Partners Management.

The firm manages $92 billion and currently employs about 1,000 professionals in 21 countries, according to IDD. The latest cuts reportedly will bring its workforce back to 2007 levels. Still, Carlyle recently completed raising a $14 billion private equity fund.

Hedge Fund Layoffs Grow

Separately, IDD reports a number of big hedge funds are cutting staff, as well. After paring expenses such as business travel, "the cost cutting is increasingly focused on reducing head count," IDD says.

One top hedge fund group is laying off 20 percent of its front office, Tabb Group Research Director Adam Sussman told the magazine, without identifying the fund. Another well-known group, GLG Partners, reportedly announced head count reductions. But GLG also has said it's committed to "selectively and opportunistically hire."

Adds Sussman: "There is a shift in the kinds of talent that hedge funds are looking for. Some of the skill sets that worked prior to this year are not working today and funds are looking for the talent needed to capitalize on current opportunities," such as investing in distressed debt.

As hedge fund assets flee, Wall Street prime brokers are feeling the squeeze, too. For instance, sources told IDD that Barclays could lay off up to 30 percent of its U.S. prime brokerage professionals.

On the other side of the coin, IDD says San Francisco-based Conifer Securities is expanding its offshore fund administration business. It recently hired David Bateman from UBS and Donna-Marie de Roche from Fortis. And Och-Ziff Capital Management recently hired an Asia real estate investment team from Morgan Stanley.

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