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Xavier Rolet is stepping down as chief executive officer of billionaire Michael Hintze’s hedge fund firm, just a year after taking the role.
Rolet, former CEO of the London Stock Exchange Group Plc, joined London-based CQS in January last year to free Hintze to focus on investing. The abrupt departure comes as the firm is growing its assets under management and is hiring more staff.
Rolet is stepping down for “reasons unconnected with CQS,” the money manager said in an emailed response to queries from Bloomberg News. He will become a strategic adviser to the firm and Serge Harry has been appointed deputy CEO. The move will be effective from February.
“Xavier will continue to provide the firm with strategic direction and advice, and use his network to help us with client development,” Hintze said in the statement. Hintze, who was previously CEO when Rolet joined, will continue as CQS’s group executive chairman and senior investment officer.
As one of the largest credit-focused hedge fund firms in Europe, Hintze’s firm has built up assets to a record $19.8 billion from $14.6 billion two years ago. CQS is expanding its asset management arm, including a recently launched fund focused on North American equities, and hired Paul Graham, former chief executive officer of AlphaGen Capital, as its new head of equities.
Hintze and Rolet have known each other for more than three decades and sat next to each other when they worked at Goldman Sachs Group Inc. earlier in their careers. Rolet, who joined the LSE in 2009, left the stock exchange in 2017 after a public spat between the board and activist investor Chris Hohn. In his tenure at LSE, he led a series of successful deals that gave the stock exchange control of the world’s largest clearinghouse and made it one of the biggest compilers of financial indexes.
CQS, which relies on flesh-and-blood analysts and managers to pick securities, is one of the largest hedge fund firms in Europe. The money manager has grown amid an exodus of capital from the industry as its peers struggle to perform or cut fees fast enough to pacify their investors.
Hintze’s main multi-strategy CQS Directional Opportunities Fund has returned more than 550% since its launch in August 2005, according to an investor letter in October. That’s double S&P 500 Index gains during the period and almost seven times the average hedge fund return. The fund returned 12% last year.
When Rolet joined CQS, the firm conducted a rare meeting with a group of journalists to announce his appointment. The move coincided with hedge fund firms around the world boosting their management teams as part of a wave of succession planning.
As an outspoken financial industry veteran, a rarity in the secretive hedge fund industry, Rolet often expresses his views publicly. His comments have ranged from his former employer to quantum computing to Extinction Rebellion, the radical climate change movement whose members have blocked traffic in London and glued themselves to jetliners. He’s talked about his personal interests, including the care of some 50,000 bees at his vineyard in Provence, France.
During his one year at CQS, Hintze’s firm strengthened its operations, started new credit products, hired an Asia macro trading team in Hong Kong and launched a long-only equities business. Rolet was also leading an effort by the firm to develop a quantum chip with a startup to help the CQS optimize portfolios and execute hedging strategies.
Last month, Rolet joined the board of Saudi stock exchange Tadawul together with his former LSE colleague Mark Makepeace.
(Updates with details on Rolet’s career from seventh paragraph)
--With assistance from Suzy Waite and Viren Vaghela.
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