Brevan Howard Asset Management has suffered through a bad year, to say the least. But this is not a hedge fund that backs down, despite several people leaving the firm. The London-based hedge fund has not only hired more people but is now launching new funds. Brevan Howard’s New York office, which was essentially not operational until June of last year, is launching a star-studded investment fund headed by Vinay Pande, former Chief Investment Adviser at Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB).
Brevan Howard launches hedge fund for Pande
According to Bloomberg‘s Jesse Westbrook, the new program, Brevan Howard Strategic Macro Fund, will be run by strategists that were poached from Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) by Brevan Howard last year. The New York office now employs 28 people and this would be its first hedge fund domiciled in New York.
The New York office also employs Don Carson, from Credit Suisse Group AG (NYSE:CS) in New York, and Josh Bertman, a mortgage trader from Credit Suisse Group AG (NYSE:CS) in Zurich.
Master fund on the brink of negative returns
On the other end, the hedge fund co-founded by Alan Howard, has taken a severe beating in the largest of its allocations. The Master Fund, which manages more than half of the firm’s $40 billion in assets, had managed to gain only 1% in this year through the end of August. Reuters’ Matthew Goldstein notes that returns have not been any better in September as well. The flagship has managed a 11.3% annualized return since inception in 2003 and has never suffered a losing month since then. The lowest the fund has returned was +1% in 2010.
Emerging markets big loser, Asia winner
Meanwhile the big loser among BH’s strategies has been emerging markets, as we have reported several times. Brevan Howard Emerging Markets Strategies Master Fund has lost 15% YTD through August. The fund is managed by Geraldine Sundstrom, one of the few female managers who have risen to recognition. It seems that the EM fund was able to gain back some of the losses in September, as returns were down 12% to October 2, Reuters reports. While sell-off in emerging markets began towards the end of May, Brevan Howard’s EM strategy was not doing any better before fears of reduced money printing in U.S seized investors across the globe, the fund incurred a -5% loss in June alone. Even BH’s Commodities Strategies has done better than EM, as it was up 3% through August.
The best work Alan Howard’s firm has done is in Asia this year. Brevan Howard Asia Master Fund has gained consistently in the past several months, the fund was up +10% to August. The Asia fund manages $2.1 billion.
According to Bloomberg, Brevan Howard’s London Office has lost at least 12 employees since May.