(Bloomberg) -- Seth Klarman’s Baupost Group dismissed about 19% of the hedge fund’s investing team in a shakeup of its real estate and equities units — the largest cull in the firm’s 42-year history.

The move affected 11 of 59 investing personnel, with the cuts distributed roughly evenly between the two businesses, according to a letter sent to investors Thursday and seen by Bloomberg. 

The shifts are part of a broader reworking of Baupost’s strategy, narrowing where it’s investing in real estate and equities and pushing more into distressed debt, special situations, event-driven equities, private wagers and capital solutions.

“This is where we expect to find the most compelling investments,” Klarman wrote in the letter.  

The real estate team, led by partner Nick Azrack, will focus more on properties with broken capital structures, distressed debt or asset re-positionings, according to people familiar with the matter. Until now, the firm had invested broadly in the sector. On the equities side, Baupost determined it had too many analysts, the people said.

“Ultimately we believe a more opportunistic approach to real estate will lead to the best outcomes,” Klarman wrote. “Our public equity team is focusing our efforts on event-driven situations and value dislocations.” 

The firm has already exited some long-standing positions and opened new ones, he added.

A representative for Boston-based Baupost, which oversaw $23 billion as of December, declined to comment. 

Equities currently make up 21% of Baupost’s portfolio, while real estate accounts for about 14%, some of the people said. 

Baupost’s last significant job cuts came in late 2020, when it shuttered its London office and dismissed eight employees. 

(Updates with name of real estate head in fifth paragraph.)

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