NEW YORK: UBS O’Connor, the US$5.7 billion hedge-fund unit within the biggest Swiss bank, is cutting 16 of 46 positions at an equity fund and plans to triple a corporate credit fund’s workforce, according to a source.

The cuts to the fundamental long-short team mostly affect employees in the US, said the source, who asked not to be identified because the details aren’t public. O’Connor, which employs about 80 people globally across all of its funds, also seeks to expand the five-person corporate credit relative value team to 15 people, the source added.

“We regularly review our business mix to address market changes and focus our resources where we see the most attractive risk-adjusted investment opportunities,” said Megan Stinson, a spokeswoman for Zurich-based bank UBS. “We are actively expanding in areas that marry strong investor demand with our talented investment professionals.”

UBS O’Connor lost at least six equity traders this year to Millennium Management, BlueCrest Capital Management and Tudor Investment Corp. The departures occurred after UBS revamped its compensation structure across the entire bank in February, paying some bonuses in bonds that only vest after five years and whose value is tied to the firm’s capital ratio.

The job reductions at O’Connor aren’t tied to the bank’s goal of paring costs, which includes a plan announced last year to cut 10,000 positions, according to the source.

Last week, UBS started informing staff within its investment bank that they’d be getting higher salaries, sources said. The bank, which last year reduced the size of bonuses, intends to keep overall compensation the same if business conditions don’t change, one of the sources said.

(BLOOMBERG)