Banks

RBS share drop accelerates on stress test flop

Stressed. Shares in Royal Bank of Scotland have accelerated their losses this morning, falling over 4.5 per cent after the state-backed lender came in bottom of the heap in the Bank of England’s latest stress tests. RBS failed the toughest ever stress tests carried out by the BoE, with results this morning showing the lender’s […]

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Capital Markets, Financial

BGC Partners eyes new platform to trade US Treasuries

BGC Partners plans to launch a new platform to trade US Treasuries early next year, in a bid to return to a market in the middle of evolution, according to people familiar with the plans.  The company, spun out of Howard Lutnick’s Cantor Fitzgerald in 2004, sold eSpeed, the second-largest interdealer platform for trading Treasuries, […]

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Financial

Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Currencies

Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Currencies

Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Categorized | Financial

Brevan Howard reverses decline as flagship fund performs


Posted on November 23, 2016

Brevan Howard, one of Europe’s largest hedge funds, has started to reverse several years of poor returns after capitalising on market moves before and after the US election.

Its main Master Fund, managed by founder Alan Howard, had returned 5.6 per cent in the month-to-date as of November 18, taking it out of the red for the year. That puts the $14bn fund up 2.88 per cent for the year and places Brevan on track for its first positive year since 2013.

Brevan’s main fund had struggled for several years as central bank intervention limited extended market moves on which it had previously capitalised, and by staying in positions for too long, reversing their gains.

In an interview with the Financial Times in September, Mr Howard predicted that the trading environment would improve “as we are getting to the limits of monetary policy and that will allow the market to price risks without central bank intervention”.

The performance of macro hedge funds, which bet on currencies and interest rates based on global economic predictions, has varied widely this year, some doing well and others struggling. Hedge Fund Research’s macro index was up 0.17 per cent for the year at the end of October.

Brevan declined to comment on the reason for the performance of the main fund.

Brevan’s assets have shrunk from a peak of $41bn — spread across nine separate funds — to $18bn across three. The Master Fund has also shrunk from a high of about $27bn after several down years and two lacklustre ones. The fund’s heyday was during the start and height of the financial crisis, when it returned more than 20 per cent in 2007 and 2008.

The fund recently offered a new share class with a 0 per cent management fee for existing investors as an enticement to stay put, but Mr Howard also said in September that he would cap the macro fund at $15bn, as it had grown too large for its strategy.

“In hindsight that was too big for the markets that we primarily specialise in, which is interest rates and FX, and especially with zero bound rates,” he said. “The main reason is the lack of risk capital in the system, specifically on the sellside. Less players in general means that it was too big a size. The markets are not as liquid as they used to be.”