Engineers Gate cuts majority of fundamental equities team after October losses

Engineers Gate, a New York-based hedge fund manager, has announced the termination of the vast majority of its fundamental equities team after a challenging October, as losses from the technology sector prompted the firm to restructure certain aspects of its investment platform, according to a Bloomberg report. The New York-based firm dismissed the head of its Synthesis team, Mike Daylamani, and the majority of the team, which constituted around 14% of Engineers Gate's gross market value at the end of October. Only five fundamental portfolio managers remain with the company.

Chief executive Greg Eisner informed investors that the team's performance did not meet the standards required to maintain its current structure. Engineers Gate suffered a 5.5% decline in October, as surges in AI and technology stock losses affected multiple hedge fund strategies. The restructuring extends beyond the Synthesis team, with the firm also exiting or reducing capital allocations to select lower-conviction portfolios.

Additionally, Engineers Gate is scaling back investments in external China-focused managers as it builds internal capabilities in Asia.

The changes reflect a broader reassessment of risk across the hedge fund industry following October's market volatility, characterized by technology-driven losses and macroeconomic shocks that forced managers to reevaluate exposure and capital allocations.