Brevan Howard to Double Fees for Listed Fund After Record Year
(Bloomberg) -- Brevan Howard Asset Management is seeking to double the fixed fees it charges clients in a listed fund after a year of record gains.
The BH Macro Ltd. fund, which invests its money in Brevan Howard’s flagship hedge fund, has been asked to pay an annual 2%, according to a company statement Friday. The current charge is 1%, according to an investor letter, after a reduction in 2017 following mediocre returns.
The move is the first sign of hedge funds trying to reverse a squeeze on fees as big names regain swagger following a record year of performance gains. Brevan Howard’s money pools gained as much as 99% last year, with the main fund surging 27.4% in its best year since it started trading in 2003.
“Noting the exceptional performance of the Master Fund, the substantial ongoing investment and the increasingly competitive environment, we have concluded that the management fee concessions agreed in 2016 and 2017 no longer support the future success of the company,” Brevan Howard said in a letter to the fund disclosed in Friday’s statement.
The fund’s fee was 2.5% prior to 2017, according to the letter. A spokesperson for Brevan Howard declined to comment further.
BH Macro’s shares trade at 9.4% above the net asset value of the fund it invests in, according to data compiled by Bloomberg, signaling demand for the security.
Brevan Howard also plans to extend investors’ notice period for termination of management of the fund to 12 months from 3 months. It will charge a fee of 2% for repurchases or redemptions in excess of annual allowance.
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