ADVERTISEMENT

Brevan Howard Main Hedge Fund Gains 8% After Inflows Return

Brevan Howard Main Hedge Fund Gains 8% in 2019 as Inflows Return

(Bloomberg) -- Brevan Howard Asset Management’s flagship hedge fund returned 8.4% last year, building on its 2018 gain and helping to pause a bleeding of assets.

The $2.7 billion Brevan Howard Master Fund posted a 1.5% return in December, according to a letter to investors seen by Bloomberg. After racking up a 12.4% gain in 2018, its best since the end of the global financial crisis, the fund saw its first net inflows in five years in May and more in later months.

The macro investment firm co-founded by billionaire Alan Howard is seeing clients return after years of outflows as performance improves. The Bloomberg index that tracks macro hedge funds was up 5.4% through November last year as some boosted returns by betting on interest rates in developed markets.

Many hedge funds are struggling to keep pace with the longest-running equities bull market in history, with closures on track to outnumber startups for the fifth year in a row. Investors yanked $81.5 billion last year through November, more than twice the amount for the whole of 2018, according to eVestment data.

While a Bloomberg index tracking hedge funds returned 7.4% in the first 11 months of last year, the S&P 500 index soared 28%.

A spokesman for Jersey-based Brevan Howard declined to comment.

Howard, 56, has overhauled his business by reducing fees and staff and shifting away from focusing mainly on the master fund. In 2017, Brevan Howard began giving star traders their own funds in a move to bring in assets. Howard, whose wealth is estimated at $1.9 billion by the Bloomberg Billionaires Index, has also stepped down as chief executive officer to focus on his trading.

Brevan Howard’s assets stood at $7.2 billion at the end of November, up from a low of $6.3 billion in February. It’s recovering from years of mediocre returns which saw its assets decline from a peak of more than $40 billion in 2013.

A group of traders including Howard himself, Alfredo Saitta and Minal Bathwal run money for the master fund. The Brevan Howard Alpha Strategies fund, which also runs an allocation from the strategy, contributed the most to its returns through November, according to another letter seen by Bloomberg.

Below are the 2019 returns for some European hedge funds:

Fund NameReturn (%)
Horseman European Select38.1
Lansdowne Clean Energy36.2
Lansdowne Princay24
Lansdowne Developed Markets Long Only18.6
Marshall Wace Eureka13.3
Marshall Wace Global Opportunities6.7
Marshall Wace TOPS UCITS5.9
Lansdowne Developed Markets Fund0.8
Horseman Japan-5.0
Horseman Global-34.9
Source: Investor documents

To contact the reporter on this story: Nishant Kumar in London at nkumar173@bloomberg.net

To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Chris Bourke, Patrick Henry

©2020 Bloomberg L.P.