Engineers Gate Cuts Most Fundamental Equities Team

Engineers Gate dismissed most of its Synthesis fundamental equities team after a review of its performance. The changes followed a 5.5% loss at the New York-based manager from the start of October through Oct. 23, according to a person familiar with the firm’s results.

The departures include Synthesis head Mike Daylamani. Five fundamental portfolio managers will remain at Engineers Gate. The team represented about 14% of the firm’s gross market value at the end of October.

Chief Executive Greg Eisner told investors that the team’s performance had fallen short of the standards required to maintain its existing structure. Losses followed sharp declines in technology and artificial-intelligence stocks, which affected several hedge fund strategies.

Engineers Gate is also ending or reducing capital allocations to a small number of portfolios it considers lower conviction. The firm is cutting allocations to external China-focused managers while developing internal investment capabilities in Asia.

The changes followed October market volatility, which led the firm to reduce exposure and review capital allocations across parts of its investment platform.