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Draghi: Eurozone will decline without vital productivity growth

It’s productivity, stupid. European Central Bank president Mario Draghi has become the latest major policymaker to warn of the long-term economic damage posed by chronically low productivity growth, as he urged eurozone governments to take action to lift growth and stoke innovation. Speaking in Madrid on Wednesday, Mr Draghi noted that productivity rises in the […]

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Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

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Barclays: life in the old dog yet

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Categorized | Financial

Rokos eclipses his old Brevan hedge fund

Posted on September 25, 2016

Chris Rokos

Chris Rokos

In less than a year since the launch of his eponymous hedge fund, Chris Rokos, the former star trader at Brevan Howard, is outperforming his former colleagues with returns of about 8 per cent in 2016.

His Rokos Capital macro fund was up as much as 10 per cent at one stage this year — a marked improvement on Brevan, whose main fund, managed by Alan Howard, was down about 2.3 per cent for the year, as of the end of July.

    Mr Rokos was also one of the few to profit on trading volatility following Britain’s vote to leave the EU. He was up about 2 per cent after the June referendum.

    Some of the biggest established names in macro trading — Brevan, Louis Bacon’s Moore Capital, Andrew Law’s Caxton Global and Paul Tudor Jones’s Tudor Investment Corp — have struggled this year while newer macro funds such as Rokos Capital and Guillaume Fonkenell’s Pharo Management have performed better. According to Hedge Fund Research, a data provider, small and midsized managers have outperformed larger, established managers across all strategies this year.

    Mr Rokos, the “R” in the Brevan acronym, left the hedge fund in 2012 after helping it to generate $4bn in trading profits since its start in 2003. He was paid about $900m during that period.

    A founding partner of Brevan, he sued the hedge fund the following year in order to exit a partnership agreement that barred him from starting his own fund for another five years. The case, filed in Jersey, settled in early 2015, and Mr Rokos’s new fund began trading in October. As part of the settlement, Brevan Howard took a stake in Rokos’s fund.

    The launch was the largest of the year in Europe and one of the most closely followed because of Mr Rokos’s history of success. He quickly raised about $3.5bn from investors including Blackstone and soft-closed so as not to grow too rapidly.

    Rokos Capital, based on Savile Row, has grown to about 60 employees. Its splashiest hire so far was Seth Carpenter, a former assistant secretary of the US Treasury and a top adviser to Treasury secretary Jack Lew.

    The only bigger hedge fund launch in the last year was from Scott Bessent, George Soros’s former chief investment officer. His Key Square fund launched with $4.5bn around the start of the year.

    Mr Rokos’s success and Brevan’s struggles come during a difficult year for macro hedge funds, which seek to anticipate global economic trades and profit on them through trading currencies and interest rates. Hedge Fund Research’s macro index is up 2.09 per cent this year, underperforming the industry across all strategies, which is up 3.46 per cent.

    Mr Rokos, an art collector and influential Tory donor, lives in London. He did not respond to a message seeking comment.