Alan Howard Is Said to Weigh Offering Fund Services to Rivals
Alan Howard Is Said to Weigh Offering Fund Services to Rivals
(Bloomberg) -- Billionaire hedge fund manager Alan Howard may go for boring.
The embattled macro trader who’s grappling with losses and investors fleeing his Brevan Howard Asset Management is considering offering administrative services to other funds in a bid to revive revenue, according to people who know him.
His firm may provide operational functions such as verifying trades, cash management and maintaining records, said the people, who asked to not be identified because discussions are private. Howard hasn’t made a final decision, they said. A Brevan Howard spokesman declined to comment.
Howard, who cemented his reputation as an interest-rate trader and whose hedge fund grew to become one of the world’s largest after outperforming during the global financial crisis, is trying to reverse the fortunes of Brevan Howard after assets slumped almost three-quarters from a peak of $40 billion. Offering fund administration services could enable Howard to put his firm’s infrastructure and know-how to maximum use.
Howard, 54, who like many macro managers is struggling to navigate markets, has instigated a number of changes recently to reboot his hedge fund. Last year, he delegated management of Brevan Howard to deputies so he could focus on trading, and in March the firm started a new fund solely managed by him. His firm this year made an about-face by allowing its main money managers to run their own funds again. A Brevan Howard executive had said two years ago that running multiple funds was a distraction.
Citadel, Winton
Howard wouldn’t be the first hedge fund manager to offer administrative services. Ken Griffin’s Citadel started such a unit a decade ago, only to sell it to custody bank Northern Trust Corp. four years later.
Hedge fund managers are looking at other ways to make money rather than merely betting on rising and falling markets as the industry is challenged by underperformance and investors pouring their money into cheaper index funds. David Harding’s Winton Group said in September it was planning to offer data services to outsiders. David Siegel and John Overdeck’s Two Sigma plans to spin out and raise money for a unit that mainly managed their own capital in hard-to-sell assets.
Brevan, which oversees about $11 billion, posted a 5.5 percent loss in the first 10 months of 2017 after years of subpar performance.
To contact the reporter on this story: Saijel Kishan in New York at skishan@bloomberg.net.
To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Josh Friedman, Vincent Bielski
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