Key Takeaways
- • Brevan Howard Asset Management is launching the Alpha Strategies Master Fund with $750 million in capital, set to launch September 1, 2018, and will be directly managed by a group of traders within the firm.
- • BH Macro Limited, Brevan Howard's listed hedge fund company, generated 9.58 percent returns in the first half of 2018—its strongest first-half performance since 2009—while the average macro hedge fund lost 1.75 percent over the same period.
- • The new fund launch reflects a strategic pivot following years of underperformance and investor redemptions; Brevan Howard's $499 million listed macro fund posted a -0.3 percent return for 2017.
- • Billionaire Alan Howard's firm is capitalizing on a relative performance advantage in macro strategies at a time when the broader sector is struggling, signaling renewed confidence in the firm's trading capabilities.
Summary
Brevan Howard Asset Management is launching a new $750 million hedge fund called the Alpha Strategies Master Fund, according to disclosures in the firm's monthly shareholder report dated July 31, 2018. The fund will be directly managed by a dedicated group of traders and is scheduled to commence operations on September 1, 2018. This launch represents a significant strategic move for the London-based macro hedge fund manager, which has faced considerable headwinds in recent years.
The timing of the new fund launch is notable given Brevan Howard's recent performance trajectory. The firm's listed hedge fund company, BH Macro Limited, generated 9.58 percent returns during the first half of 2018—representing its strongest first-half performance since 2009. This stands in sharp contrast to the broader macro hedge fund sector, where the average fund declined 1.75 percent over the same six-month period, according to Hedge Fund Research data. BH Macro Limited's assets are fully invested in Brevan Howard's main $3.7 billion fund.
The new fund launch underscores a recovery narrative for billionaire Alan Howard's firm, which has struggled with sluggish performance and significant investor outflows in recent years. The firm's $499 million listed macro fund posted a -0.3 percent return for the full year 2017, highlighting the challenges the organization faced prior to its 2018 turnaround. The Alpha Strategies Master Fund launch demonstrates management's confidence in its trading team and appears designed to capitalize on renewed momentum in macro strategies while the broader hedge fund industry continues to underperform.
The timing of the new fund launch is notable given Brevan Howard's recent performance trajectory. The firm's listed hedge fund company, BH Macro Limited, generated 9.58 percent returns during the first half of 2018—representing its strongest first-half performance since 2009. This stands in sharp contrast to the broader macro hedge fund sector, where the average fund declined 1.75 percent over the same six-month period, according to Hedge Fund Research data. BH Macro Limited's assets are fully invested in Brevan Howard's main $3.7 billion fund.
The new fund launch underscores a recovery narrative for billionaire Alan Howard's firm, which has struggled with sluggish performance and significant investor outflows in recent years. The firm's $499 million listed macro fund posted a -0.3 percent return for the full year 2017, highlighting the challenges the organization faced prior to its 2018 turnaround. The Alpha Strategies Master Fund launch demonstrates management's confidence in its trading team and appears designed to capitalize on renewed momentum in macro strategies while the broader hedge fund industry continues to underperform.
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