Brevan Howard

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Brevan Howard
Private
IndustryInvestment management
Founded2002; 16 years ago (2002)
FounderAlan Howard
HeadquartersJersey
ProductsHedge funds
AUM$18 billion (2016)
Websitebrevanhoward.com

Brevan Howard (Brevan Howard Asset Management LLP)[1] is a European hedge fund management company based in Jersey[2] with its funds domiciled in the Cayman islands.[3] The company was co-founded by Alan Howard and four others in 2002.[4][5] It was once described as one of the largest "macro hedge funds" in the world[6][7] with $40 billion in assets under management (AUM) as of October 2013[8][9] before downsizing to $18 billion in 2016.[10]

History[edit]

Brevan Howard was co-founded in 2002 by former Credit Suisse traders Alan Howard,[3] Jean-Philippe Blochet, Chris Rokos, James Vernon, and Trifon Natsis.[4][11][12] The company name was created by utilizing portions of the last names of the co-founders.[13] Blochet took a "sabbatical" in 2008, returned and left the firm again in November 2009.[14] Vernon left his position as chief executive officer (CEO) in 2011 but returned to the company as group chief operating officer (COO) in September 2013.[15][16] Another co-founder, Rokos, retired from the company in 2012.[15][17] The company received $2 billion to manage in the global macro fund from Credit Suisse Private Bank. Under the leadership of Brevan Howard's founding partner, assets grew to $10.5 billion in 2006.[18] The company generated a 25% return in 2007 and returns from their global macro fund continued to perform well during the financial crisis of 2008.[18]

In 2010, the company moved its headquarters from London to Geneva.[12] In July 2012, the firm opened an affiliate firm in New York called Brevan Howard U.S. Investment Management LP which had about $800 million in assets under management.[12] By 2013 the company had established Brevan Howard Capital Management LP on the island of Jersey.[19] As of June 2013 it was reported to be the largest European hedge fund management firm based on its total AUM.[5][19] An April 2013 article in the Financial News described the company as "the biggest and best-performing [hedge fund management] firm in Europe".[4] In 2015, The company reduced its workforce by about 10% due to reduced management assets and diminishing returns.[20] The fund had further losses in 2014 and 2015 and had only $14.5 billion in assets as of October 2016.[10] By 2016, the firm had reduced its assets under management (AUM) from $41 billion spread across nine funds in 2013 to an $18 billion AUM spread over three funds.[10]

Investment funds history[edit]

In 2012, a founding partner, said the firm's overall strategy is focusing on "near-term opportunities" and establishing investment positions that are maintained for one to six months.[18] As a macro hedge fund, in 2013, the company aspires to profit as a result of "broad economic trends" and trades many types of assets including commodities and currencies.[19]

The firm set up 11 funds [21] including the Brevan Howard Master Fund (BHMF) 2003, Brevan Howard Multi-Strategy Master Fund Limited (BHMS) 2008, Brevan Howard Emerging Markets Strategies Master Fund Limited (BHEMS) 2007, Brevan Howard Credit Catalysts Master Fund Limited (BHCC) 2009, the Brevan Howard Asia Master Fund Limited (BHA) 2004,[5] the Brevan Howard Emerging Markets Local Fixed Income Fund (BHEML),[22] Brevan Howard Credit Catalysts Master Fund Limited ("BHCC"),[23] Brevan Howard Commodities Strategies Master Fund Limited ("BHCS"),[24] Brevan Howard Systematic Trading Master Fund Limited ("BHST"),[25] Brevan Howard Credit Value Master Fund Limited ("BHCV"),[26] Brevan Howard CMBS Master Fund Limited ("BHCMBS"),[27] Brevan Howard Investment Fund II - Macro FX Fund Limited ("BHMFX"),[28] The company also manages three closed-ended feeder funds, listed on the London Stock Exchange. They are: BH Global Limited (BHMG), BH Macro Limited (BHGG)[29] and Brevan Howard Credit Catalysts Limited (BHCC).[30]

Its flagship fund, the Brevan Howard Master Fund Ltd. was capped at $25 billion AUM and closed to new investors in 2012.[18] It had a $28 billion AUM as of October 2013 and was reported to be the 11th most popular hedge fund among institutional investors in the U.S.[9] As of 2013, the Master Fund had averaged a 12 percent annual gain since its inception in 2003.[9][19][31] After 10 years the fund reported its first annual loss of 0.8% in 2014.[32][33]

Corporate affairs[edit]

Brevan Howard describes itself as a "global alternative asset manager" and maintains offices in London, Geneva, St. Helier, Hong Kong, Tel Aviv, Washington and New York.[34] The company employs more than 430 people worldwide with 28 employees in its New York office[9] and more than 40 employees at its offices located on the island of Jersey.[15][18][35] Eighty of its employees are traders[21] that receive commissions equal to "11% to 17% of gains."[4] This segment of the employee base includes 15 traders who work at the company's Ramat Gan, Israel office[36] with 38 traders being added to the "global team" of employees in 2012.[4] According to one of the company's founding partner's, "high turnover is part of the business model" and traders are "cut" if they do not perform up to the company's standards for success.[13][18] According to one investment consultant, "It's a very mercenary [corporate] culture.” [5] Brevan Howard's standards for success in trading are so high that some traders who have been dismissed from Brevan Howard "have become stars at other firms."[13] Geraldine Sundstrom, joined the company in 2007 and was the portfolio manager for the Brevan Howard Emerging Markets Strategies Master Fund Limited.[9][37] Sundstrom left the company in 2014 when the fund she managed was shut down.[38]

The company operated offices in Singapore from 2007 to 2014.[2]

Brevan Howard has made a variety of philanthropic contributions to the Imperial College Business School (ICBS). The company donated £20.1m over eight years to fund a financial economics research centre.[39] As of 2013 the firm had donated £1.5m to ICBS's, Alan Howard Scholarships for Energy Futures.[39] In 2012, BrevanHoward pledged a £250,000 donation to the ARK Bentworth PrimaryAcademy.[40]

British finance professionals consider the company to be their first choice for employment.[41] The company is noted for hiring ex-investment bank traders and highly qualified quantitative analysts.[42]

See also[edit]

References[edit]

  1. ^ Teitelbaum, Richard (12 Jan 2012). "Brevan Howard Proves Master of Hedge Funds With Four in Top 100". Bloomberg.
  2. ^ a b Hu, Bie (Sep 19, 2016). "Brevan Howard, Caxton Expand in Asia Amid Hedge Fund Woes". Bloomberg. Retrieved Dec 18, 2016.
  3. ^ a b Griffiths, Tony (6 October 2010). "The HFMWeek 50 most influential people in hedge funds". HFMWeek. Archived from the original on 9 October 2010. Retrieved 5 August 2011.
  4. ^ a b c d e "Alan Howard". Financial News. 2 April 2013.
  5. ^ a b c d McIntosh, Bill (July 2012). "Europe 50" (PDF). The Hedge Fund Journal.
  6. ^ Jones, Sam (16 July 2013). "Return of the blueblood macro hedge funds". Financial Times. Retrieved 20 September 2013.
  7. ^ Moodley, Kiran (1 Sep 2011). "How have hedge fund elite fared in the summer turmoil?". Citywire Wealth Manager.
  8. ^ Laurence Fletcher (19 March 2013). "Faith in policymakers may be "serious error": Brevan Howard". Reuters.
  9. ^ a b c d e Goldstein, Matthew; Ablan Jennifer; Wachtel, Katya (10 October 2013). "Top global hedge fund Brevan Howard takes emerging markets hit". Reuters. Retrieved 18 October 2013.
  10. ^ a b c Fortado, Lindsay (Oct 5, 2016). "Brevan Howard founder says fund will stay open despite losses". Financial Times. Retrieved Dec 18, 2016.
  11. ^ Bill McIntosh (July 2012). "Europe 50" (PDF). The Hedge Fund Journal.
  12. ^ a b c Callahan, Neil & Westbrook, Jesse (12 Oct 2012). "www.bloomberg.com/news/2012-10-12/brevan-howard-said-to-consider-leasing-new-london-office-space.html". Bloomberg News. Retrieved 27 September 2013.
  13. ^ a b c Teitelbaum, Richard & Cahill, Tom (31 March 2009). "Brevan Howard Shows Paranoid Survive in Hedge Fund of Time Outs". Bloomberg. Retrieved 7 October 2013.
  14. ^ Dealbook. "Co-Founder of Brevan Howard to Leave Firm".
  15. ^ a b c Brewer, Kirstie (5 Sep 2013). "Vernon returns to Brevan Howard". HFMweekonline.
  16. ^ Jones, Sam (25 July 2011). "Brevan Howard co-founder to leave firm". Financial Times.
  17. ^ Westbrooke, Jesse (17 Aug 2012). "Brevan Howard Loses Third Founder as Rokos Said to Leave". Bloomberg.
  18. ^ a b c d e f Williamson, Christine (1 October 2012). "Brevan Howard attracting institutions". Pensions & Investments.
  19. ^ a b c d Westbrook, Jesse (5 September 2013). "Brevan Howard Co-Founder Vernon Returns After Two Years". Bloomberg. Archived from the original on 11 November 2013. Retrieved 6 October 2013.
  20. ^ Kishan, Saijel (Nov 6, 2015). "Brevan Howard Is Said to Cut 50 Jobs After Assets Decline". Bloomberg. Retrieved Dec 16, 2016.
  21. ^ a b "Alan Howard: Hard work pays off for 'the Stakhanov of finance". Financial News. 2 Apr 2013.
  22. ^ Bill, McIntosh (March 2013). "Brevan Howard Emerging Markets Local Fixed Income Fund". The Hedge Fund Journal.
  23. ^ "Brevan Howard Proves Master of Hedge Funds With Four in Top 100" – via www.bloomberg.com.
  24. ^ "Brevan Howard Opens $200 Million Commodities Fund to Investors" – via www.bloomberg.com.
  25. ^ "Brevan Howard Systematic Trading Master Fund: BH-DG Systematic Trading - Risk.net".
  26. ^ "Brevan Launches New Credit Fund With $20M Minimum - FINalternatives".
  27. ^ "Brevan Howard Buying CMBS Sees 60% Gains for Teachers: Mortgages" – via www.bloomberg.com.
  28. ^ Morningstar Global Documents
  29. ^ Smith, Justin (11 November 2008). "BH Global and BH Macro announce secondary listing in Dubai". Business Intelligence Middle East.
  30. ^ Chandler, Beverly (9 November 2011). "BHCC offers listed diversification in difficult markets". Opalesque. Retrieved 13 March 2014.
  31. ^ Taub, Stephen (25 January 2013). "After tepid 2012, Brevan Howard founder forecasts strong year for macro funds". Institutional investor's Alpha.
  32. ^ Johnson, Miles (Jan 7, 2015). "Flagship Brevan Howard fund reports first annual loss". Financial Times. Retrieved Feb 6, 2017.
  33. ^ Johnson, Miles (7 January 2015). "Flagship Brevan Howard fund reports first annual loss". Financial Times.
  34. ^ Unknown author (Unknown date). "Brevan Howard". Brevan Howard. Retrieved 27 September 2013. Check date values in: |date= (help)
  35. ^ Westbrook, Jesse (20 November 2012). "Brevan Howard on Hiring Spree Makes Comeback in New York". Bloomberg. Retrieved 27 September 2013.
  36. ^ Eytan Avriel (22 February 2010). "The way the big boys bet". Haaretz.
  37. ^ Unknown author,Milken Institute, Biography Archived 14 March 2014 at the Wayback Machine., Retrieved 13 March 2014
  38. ^ Westbrook, Jesse (Feb 11, 2014). "Brevan Said to Shut Emerging Markets Fund After Losses". Bloomberg. Retrieved Dec 18, 2016.
  39. ^ a b Bradshaw, Della (11 March 2013). "Brevan Howard gives £20.1m to Imperial College". Financial Times.
  40. ^ "Headmaster as Chair of the Local Governing Body of ARK Bentworth Primary Academy" (PDF). cityoflondon.gov.uk website. 19 June 2012.
  41. ^ "The 15 hedge funds and private equity firms everyone wants to work for - eFinancialCareers". eFinancialCareers. 2016-02-23. Retrieved 2016-06-04.
  42. ^ "Proof that Brevan Howard only hires über-qualified, elite, quantitative graduates - eFinancialCareers". eFinancialCareers. 2013-11-28. Retrieved 2016-06-04.

External links[edit]