Asset management company WP Stewart & Co. Ltd. has announced plans to move its Bermuda operations and headquarters to New York, with the loss of five local jobs.

The company, which managed about $1.5 billion in assets as of the end of 2009, also revealed its intention to reorganise as a corporation domiciled in the US state of Delaware.

WP Stewart CEO Mark Phelps said in a statement yesterday that the reorganisation would simplify the company's structure and reduce its cost base.

"By relocating the company's Bermuda operations and further concentrating our team in New York, we expect to be able to reduce net expenses by approximately $2.5 million per year," Mr. Phelps added.

The company has offices at Trinity Hall, 43 Cedar Avenue, Hamilton, as well as in New York, the Netherlands and Hong Kong.

In an interview with The Royal Gazette yesterday, WP Stewart's chief financial officer and managing director, Susan Leber, said all five full-time employees in the Bermuda office would all be made redundant. All had been notified, she added.

None has been offered a job in the new New York headquarters, as the cuts are part of an ongoing downsizing of the company.

"Because our business is about a quarter of the size it was, we have downsized in all our offices," Ms Leber said. "We have cut our staff across the whole company by over half."

After the reorganisation is complete, WP Stewart's global staff will total approximately 40 people, down from 113 a little over three years ago.

The shrinkage of WP Stewart's business is evident in its assets under management, which totalled $8.1 billion at the end of 2006, but had plunged to around $1.4 billion two years later.

Many asset management companies were hit by large redemptions as markets plunged during the financial crisis.

The sharp decline in assets to manage has resulted in sharply declining revenues from fees. Yesterday the company announced a net loss of $3.8 million for the third quarter of last year, on top of the $9.6 million loss for the first half of the year it had previously revealed.

Ms Leber said the $2.5 million estimated expense savings from moving from the headquarters from the Island to New York did not necessarily reflect a high cost of doing business in Bermuda.

The figure was based on a combination of savings from the reorganisation, including cut salaries and the closed office, she said.

Last year the company voluntarily delisted from the New York Stock Exchange and changed its primary listing to the Bermuda Stock Exchange (BSX). WP Stewart's general counsel Seth Pearlstein confirmed the company would be delisting from the BSX as part of its reorganisation.

Pending shareholder approval and permission from the Bermuda Supreme Court, the company hopes to complete its reorganisation during the second quarter.

The new Delaware corporation will be known as WPS Delaware. Under the terms of the reorganisation, shareholders will exchange each company share for one share of WPS Delaware.

When the process under a scheme of arrangement is complete, WPS Delaware, as the surviving company, will change its name to WP Stewart & Co, Ltd.