Hedge Fund Managed by Billionaire Howard Gained 37% in May

Alan Howard is back.

The billionaire trader posted a 37% gain last month in his own hedge fund that makes riskier bets, according to a person with knowledge of the matter, burnishing a trading reputation dulled in recent years by subpar performance at his Brevan Howard Asset Management.

Howard’s AH Master Fund, which he started in 2017, is now up about 44% this year, the person said.

“I am happy that the loyalty and confidence shown by my investors has been rewarded with a very positive result,” Howard, 54, said by email, without confirming the returns. It wasn’t immediately clear which of the fund’s bets generated such a major return in the month.

Howard’s performance marks a significant turnaround for the no-nonsense, fast-talking trader, who like many of his macro peers has struggled to make money for years. Interest rate increases, geopolitical risks and rising volatility this year have created fresh opportunities for macro traders, who have blamed central bank policies for undermining many of their traditional trades. Howard’s May gains come as political turmoil in Italy fueled concern about the country’s debt burden and membership in the euro region, sparking a selloff in markets.

Howard’s own fund manages about $2.3 billion including his money, that of outside investors and Brevan Howard’s main fund.

The AH Master Fund is open to small amounts of new money from existing Brevan Howard investors, at a management fee of 0.75 percent and a performance fee of 30%, another person said. A spokesman for the firm declined to comment on performance and assets.

After years of lackluster performance, Brevan Howard’s main fund is also making money.

The $4.2 billion Master Fund, which is managed by a team of traders, gained 7.6% in May, its best monthly return since the 2008 financial crisis.

The return this year is now 8.9%. Other macro traders who profited in May include Jeffrey Talpins, whose hedge fund, Element Capital Management, gained 4% in May and 17.5 percent this year.

Middling performance over the years had prompted investors to pull money from some of the oldest and most established macro traders including Paul Tudor Jones and Andrew Law. Brevan Howard’s assets have slumped about 75% from their 2013 peak to about $8 billion now.

The decline had last year fueled speculation that Howard may be the latest hedge fund manager to throw in the towel on his business and turn into a family office -- something the firm ruled out in December.

Brevan Howard has cut fees, employees and returned to a previous business model of running several funds in a bid to reduce reliance on one main money pool.

Macro funds showed signs of staging a comeback earlier this year after posting gains.

And investors have poured almost $12 billion into such funds during the first four months of the year, the most of any strategy, according to data compiled by eVestment.


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