11/12/2008

Chilton Fires 30, Undoing 2-Year Expansion

Chilton Investment let go about 30 staffers last week, as it scales back operations to cope with a $2.5 billion drop in assets over the past four months.

The New York firm showed the door to about 20% of its staff, starting with the most-junior employees and working up from there. Most low-level staffers had been kept somewhat in the dark about the state of the company since the end of September, when Chilton cut off their access to its quarterly investment letter.

The departed staffers included all but one member of Chilton's distressed-investment team. That worker stayed on to oversee the liquidation of those holdings.

Chilton now has about 120 employees, which is where it stood before embarking on an ambitious expansion effort about two years ago. Like many fund operators, Chilton is being forced to cut costs as it struggles to survive the prolonged financial crisis.

Chilton was managing about $6.5 billion of investments in early October, down from $9 billion at midyear. One of its biggest vehicles is the $3 billion Chilton Global Natural Resources Partners, which invests in stocks issued by companies in mining, energy and related industries.

The fund suffered losses after taking mostly long positions. They turned out to be wrong bets a few months ago, when plunging commodities prices decimated the stocks of natural-resources companies

Richard Chilton, who founded the firm in 1992, runs its flagship equities fund. His outfit has been putting down roots in Asia over the past 18 months or so, launching two funds focused on the region and opening offices in Hong Kong and Beijing.

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