Engineers Gate has cut most of its fundamental equities team following a difficult October, as losses linked to the technology sector selloff prompt the firm to restructure parts of its investment platform, according to a report by Bloomberg.

The New York-based manager has dismissed the majority of its Synthesis team, including its head, Mike Daylamani, following a review of performance. The team accounted for approximately 14% of Engineers Gate's gross market value at the end of October, with five fundamental portfolio managers remaining at the firm.

Chief executive Greg Eisner told investors that the team's performance had fallen short of the standards required to maintain its existing structure. Engineers Gate was down 5.5% for October through 23 October, according to a person familiar with the firm's results, as sharp reversals in AI and technology stocks triggered losses across multiple hedge fund strategies.

The restructuring extends beyond Synthesis, with Engineers Gate also exiting or reducing capital allocations to a small number of lower-conviction portfolios. The firm is additionally scaling back allocations to external China-focused managers as it develops internal investment capabilities in Asia.

The changes come amid a broader reassessment of risk across the hedge fund industry following October's market volatility, which saw technology-driven losses and macroeconomic shocks force managers to reduce exposure and reconsider capital allocations.