Brevan Howard Plans Asia Macro Fund Run by Trader Bathwal

(Bloomberg) -- Brevan Howard Asset Management is raising money for a new macro hedge fund managed by long-time trader Minal Bathwal, according to people with knowledge of the matter.

The MB Macro Fund, which will focus on trends in Asia, is slated to start trading by the end of the second quarter, according to one of the people. A Brevan Howard spokesman declined to comment.

Brevan’s billionaire co-founder Alan Howard is trying to reboot a firm whose assets shrank to less than $10 billion from a peak of $40 billion in 2013. Several years after shuttering half a dozen funds to focus on the Master Fund, Howard is now hoping to draw fresh capital to the firm by offering separate products run by his star traders. He’s also creating single-strategy pools to trade markets including interest rates, volatility and Greek stocks.

Bathwal, who is based in Singapore, has posted an annualized return of 17.5 percent since he joined the firm in 2008, and never had a down year over that span, according to the people.

The Master Fund, which recorded its worst ever annual performance in 2017, is overseen by about 20 traders including Bathwal and has seen its assets shrink to below $5 billion as of the end of February. Its performance fell 1.7 percent in March, bringing results in the first quarter to 0.2 percent, according to people with knowledge of the matter.

Macro hedge funds appear to be making a small comeback after years of poor performance. They rose 1.4 percent in the first three months of the year, compared to a gain of 0.24 percent across hedge fund strategies over the same period, according to preliminary estimates by Eurekahedge.

Brevan’s push to start macro funds comes amid expectations that rising interest rates will result in more lucrative trading. Brevan last year started the AS Macro Fund overseen by Alfredo Saitta, whose produced annualized gains of about 12 percent since he joined the firm in 2011, Bloomberg reported in July. It also started the AH Master Fund, which is solely managed by Howard and is designed to be more volatile to achieve bigger profits. Those funds, like Bathwal’s, oversee a mix of outside capital and a portion of the Master Fund.

Investor sentiment toward macro hedge funds turned positive last year, with the strategy attracting $10.8 billion in net assets, the most since 2011, according to data compiled by Hedge Fund Research Inc.

The firm is also raising $500 million for two funds focused on Greece, which will be managed by founding partner Trifon Natsis. It also started the Global Volatility Master Fund and is planning the CMS Curve Cap Master Fund, led by Rishi Shah, which is designed to profit from expectations of higher or more volatile interest rates.

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