Six exit hedge fund firm NewSmith in cost cuts

LONDON (Reuters) - NewSmith Capital Partners, one of the hedge fund firms to appear before a parliamentary committee investigating the UK banking crisis in January, has lost six staff as it cuts costs in a tough period for the industry.

According to a regulatory filing obtained by Reuters on Tuesday, Edward Johnson, an analyst on the firm's resources and energy fund, and Ben Squire, an analyst on the credit fund, are no longer members of the firm.

The firm, which employs around 70 people, has also parted company with Sadiq Currimbhoy, a strategist on the firm's Global Opportunities fund. A spokesman said investors had taken up an option to withdraw their assets from the liquid part of the fund and keep the remaining part of the portfolio as a private equity vehicle.

Keith Fielden, who worked on the firm's operations side, has also left the firm, as have Hiroshi Nishimura and Shinya Kawahara, who worked in marketing in Tokyo, although the firm has hired Fumiya Kobayashi in marketing.

The NewSmith spokesman confirmed there had been a rationalisation.

"There has been very little change to the UK and European businesses. We believe performance has been satisfactory," he said.

The cost cuts come after a tough period for the hedge fund industry, which saw record poor performance and waves of client outflows last year.

NewSmith's UK equity long/short fund returned 9.4 percent while the European fund gained 9.92 percent in 2008, compared with losses of nearly 20 percent from the average fund in that sector.

In February Reuters reported that Jeremy Silewicz, who worked as a fund manager and then in marketing, and Andrew Irving, a member of NewSmith's operations team, had left the firm.

In the year to November 2007 NewSmith Capital Partners LLP made a profit to be divided among its members of 24.2 million pounds.

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(Editing by Erica Billingham)