Alan Howard’s Brevan Howard Asset Management is clearly distinguishing itself as the go-to fund during market turmoil.
Its BH Macro Fund is up 4.85 percent this month, through last Friday. In fact, it was up nearly 3 percent last week alone when the Dow Industrials swung up or down at least 400 points on four different occasions after Standard & Poor’s downgraded the debt of the U.S. Treasury.
As a result, the fund — which invests all of its money in the Brevan Howard Master Fund — is up 9.74 percent for the year.
In 2008 when the global markets all but melted down, the $24 billion Brevan Howard Master Fund was up an astonishing 20.43 percent.
The London-based fund uses active leveraged trading and invests mostly in global fixed income and foreign exchange markets, employing a combination of global macro and relative value trading strategies.
It is not clear at this time which trades and strategies have enabled the fund to make money last week, this month and this year.
As of the end of July, however, 48 percent of its exposure was in Europe, according to a report to clients. Another 25 percent was invested in the Americas.
Its largest exposure by far was to the euro.
In June the fund made money mainly in U.S. dollar interest rates trading. These gains were more than offset by losses in commodities, foreign exchange and credit, according to a Brevan Howard report, the most recent one detailing where its profits and losses have come from.
Brevan Howard Asset Management was founded in 2002 by former members of the CSFB Developed Market Rates trading team and was led by Alan Howard. Howard, who spent 20 years working at Credit Suisse and its predecessor companies, including First Boston as head of interest-rates derivatives trading, spun out Brevan Howard from Credit Suisse after John Mack tried to cut his pay. Today the firm has roughly $32 billion under management and manages absolute return strategies for more than 450 institutional investors in 35 countries.
Since its inception in April 2003, the fund has never suffered a down year. Last year it was only up 1 percent after climbing 18.65 percent in 2009.
Its worst monthly loss ever was when it was down 2.92 percent in August of 2003. That year it finished up 4.62 percent after just nine months of operation.
In June, co-founder James Vernon, the “V” in Brevan, left the firm. The firm said he will continue to act as a non-executive boardmember of Brevan Howard’s non-UCITS funds.
This followed the departure two years ago of co-founder Jean-Philippe Blochet, who later turned up at Moore Capital. However, he left Moore earlier this year.
