Jabre Cuts Back, Lays Off Nine, as Convertibles Market Declines

Oct. 31 (Bloomberg) -- Philippe Jabre's Jabre Capital Partners SA laid off nine employees in Geneva and shut its Singapore office amid a collapse in convertible bonds, two people with knowledge of the situation said.

The hedge fund firm is offering the six employees in Singapore jobs if they relocate, said the people, who declined to be identified because the company is closely held. Jabre left GLG Partners Inc. during a Financial Services Authority probe and raised almost $3 billion to start his own firm last year, hiring as many as 65 people, for Europe's largest hedge fund start-up of 2007.

Jabre, 48, who specializes in convertible arbitrage, is among dozens of hedge funds that have suffered as banks cut the amount of leverage they make available and short-selling limits crimps the strategy. Convertible bonds have lost almost half their value since May, according to an index compiled by UBS AG.

``Whoever is in convertible bonds is not having a good time,'' said Jacob Schmidt, founder of Schmidt Research Partners Ltd., a London-based hedge fund advisory firm. ``The convertible bond market has gotten hammered. Over the last few months nobody wants to hold convertibles.''

Hedge funds may cut as many as 10,000 jobs this year as they struggle with their biggest losses in two decades, Michael Karp, head of New York-based executive search firm Options Group, said earlier this month. Hedge funds have lost an average of 17 percent this year as the subprime-mortgage meltdown ignited a global financial crisis, according to data compiled by Chicago- based Hedge Fund Research Inc. Jabre declined to comment.

Jabre's Jabcap Global Convertibles Fund Ltd. dropped 15 percent this month through Oct. 21, and is down 17 percent for the year-to-date, according to data compiled by Bloomberg. The fund had been up 6.3 percent through May. Jabcap Multi-Strategy Ltd., the largest of the firm's funds, fell 10 percent in September, its worst month, for a year-to-date decline of 19 percent.

The Material provided above is for information only and does not constitute an offer or solicitation to purchase or sell the shares mentioned