Paul Leff, who co-founded Perry Capital with Richard Perry in 1988, is stepping back from managing the hedge fund firm's portfolio full time, according to two people familiar with the situation.
David Russekoff, a 12 year Perry veteran, is now the firm's sole chief investment officer, according to the people. Russekoff had shared the role with Leff, who will remain at the firm but in a diminished role as vice chairman. Perry remains president and chief executive officer.
Leff and Michael Neus, the firm's general counsel, did not respond to requests for comment Monday evening. Perry managed $8.9 billion as of September 2013 with 104 employees in New York and London. Leff owns less than five percent of the firm, according to a 2013 filing with the Securities and Exchange Commission.
Perry had already started to transition its leadership. Until the fall of 2012, Leff was Perry's sole CIO. It was then that Russekoff was named co-CIO after having managed the firm's credit and equity special situations portfolio. Leff had focused on structured credit and overall portfolio construction, according to a letter to investors at the time.
Leff's reason for reducing his role at Perry was not immediately available. But he has at least one big hobby: trying to turn around a struggling professional football team.
Leff is a partial owner of the Oakland Raiders, who finished the season with four wins and 12 losses. Mark Davis is the main owner, but Leff, former Perry managing director Dan Goldring and fellow hedge fund manager David Abrams of Abrams Capital bought a 20 percent interest in the team for $150 million in 2007. That gave the Raiders a value of at least $750 million. Today, the team is worth an estimated $825 million but is the least valuable of 32 franchises in the National Football League, according to Forbes.
(Read more: The big money behind the Cardinals, Red Sox)
The flagship Perry Partners International fund gained 19.5 percent through Dec. 27, according to a report by HSBC Alternative Investment Group. It attempts to profit from corporate events such as liquidations or mergers and acquisitions, a so-called "event-driven" strategy. The fund has produced net annualized returns of 12.11 percent since September 1993.
—By CNBC's Lawrence Delevingne. Follow him on Twitter