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About the $100m loss at Balyasny

Big loss in Mayfair

Last month, hedge fund boss Dmitry Balyasny was in London. He was visiting the Mayfair office of Balyasny Europe, the London branch of the eponymous multistrategy hedge fund he runs. But when Dmitry surveyed his Mayfair scene, there will have been some notable absences.

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Bloomberg is reporting today that George Klavdianos, Balyasny's London-based global head of event driven credit, is leaving the firm.  Other credit portfolio managers are also leaving, after a US credit portfolio manager largely contributed to a $100mm loss after unwind costs for the business as a whole. This has not been confirmed by Balyasny or by Klavdianos. Klavdianos didn't respond to a request to comment and is still at Balyasny according to the FCA Register. 

The latest apparent loss follows problems in Balyasny's equities business. The fund voluntarily parted ways with Jeff Runnfeldt, its global head of equities, in October. Runnfeldt's exit came after the departure of four equities portfolio managers in August. Business Insider reported that another two equities portfolio managers left last month and that returns in the year to November were just 1.5%. Dmitry himself is now understood to be running the equities business. 

A $100mm loss in event driven credit seems like a further headache. Event driven credit ran about 5% of Balyasny's assets under management.

Balyasny didn't respond to a request to comment on the size of Klavdianos's team or on the individuals comprising it. In December 2020, however, Balyasny hired Zhirayr Nersessian from Morgan Stanley to work in event driven credit risk in London. Others working on the strategy in London included senior analyst Leon Haack, who left in November according to the FCA Register.

Balyasny Asset Management (BAM) has been expanding fast in Europe and pays very well. According to the most recently filed accounts, for 2022 Balyasny Europe Asset Management paid an average of £1m ($1.2m) in 2022, and headcount increased nearly 70% to 266 people in a 12-month period. 

Klavdianos has a good pedigree, having worked for Citadel and Apollo previously. Global Capital reported that Klavdianos, known for high yield credit investing, left Citadel in 2019.

While funds like Millennium are known for dispassionately policing stop losses on portfolio managers' accounts, Dmitry Balyasny has a more nurturing approach. “We try to be a really good partner for people in the best sense of the term," he said a few months ago. By that time, though, Klavdianos et al had already gone. 

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AUTHORSarah Butcher Global Editor

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