Hedge Fund Brevan Howard Gets $3 Billion in New Cash Commitments

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(Bloomberg) — Brevan Howard Asset Management has received $3 billion in new cash commitments from investors in the latest sign that one of the world’s best-known macro trading firms is on track to regain its lost glory.

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The cash injection will lift Brevan Howard’s assets to about $20 billion, more than triple the amount they had shrunk to three years ago, according to people familiar with the matter, who asked not to be identified because the details are private. The firm, co-founded by billionaire Alan Howard, once ran more than $40 billion but suffered persistent outflows during years of mediocre returns.

Brevan Howard is pulling in cash even as peers who bet on economic trends are shunned by investors. Macro funds have barely raised any money this year compared with $38 billion of inflows pouring into the wider industry.

The firm’s turnaround was fueled by a record 27.4% return in its flagship hedge fund last year as well as a 99% gain in a money pool that bet on the U.S. yield curve. But performance in 2021 has so far failed to match those gains, with the main fund up just 1.5% through September, according to an investor update seen by Bloomberg.

A spokesperson for the Jersey, Channel Islands-based investment firm declined to comment.

The new money will flow into co-investment opportunities, and comes as the firm stops accepting new cash into its two biggest multi-manager funds following a record year of performance.

The recovery follows a change of strategy at the firm now led by Chief Executive Officer Aron Landy, who is shifting the money manager away from being a founder-led hedge fund toward a broader financial-services operation.

Brevan Howard has created entities such as fund services business Coremont to free itself to focus on investments, and generated fresh income by lending its back office support infrastructure to external managers. It’s moved beyond its flagship fund to offer multiple products, co-investment opportunities as well as a fund dedicated to digital assets.

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