Brevan Howard plans Asia macro fund

NEW YORK: Brevan Howard Asset Management is raising money for a new macro hedge fund managed by long-time trader Minal Bathwal, according to people with knowledge of the matter.

The MB Macro Fund, which will focus on trends in Asia, is slated to start trading by the end of the second quarter, according to one of the people. A Brevan Howard spokesman declined to comment.

Brevan’s billionaire co-founder Alan Howard is trying to reboot a firm whose assets shrank to less than US$10bil from a peak of US$40bil in 2013.

Several years after shuttering half a dozen funds to focus on the Master Fund, Howard is now hoping to draw fresh capital to the firm by offering separate products run by his star traders.

He’s also creating single-strategy pools to trade markets including interest rates, volatility and Greek stocks.

Bathwal, who is based in Singapore, has posted an annualised return of 17.5% since he joined the firm in 2008, and never had a down year over that span, according to the people.

The Master Fund, which recorded its worst ever annual performance in 2017, is overseen by about 20 traders including Bathwal and has seen its assets shrink to below US$5bil as of the end of February.

Its performance fell 1.7% in March, bringing results in the first quarter to 0.2%, according to people with knowledge of the matter.

Macro hedge funds appear to be making a small comeback after years of poor performance.

They rose 1.4% in the first three months of the year, compared to a gain of 0.24% across hedge fund strategies over the same period, according to preliminary estimates by Eurekahedge.

Brevan’s push to start macro funds comes amid expectations that rising interest rates will result in more lucrative trading.

Brevan last year started the AS Macro Fund overseen by Alfredo Saitta, whose produced annualised gains of about 12% since he joined the firm in 2011, Bloomberg reported in July.

It also started the AH Master Fund, which is solely managed by Howard and is designed to be more volatile to achieve bigger profits. Those funds, like Bathwal’s, oversee a mix of outside capital and a portion of the Master Fund.

The firm is also raising US$500mil for two funds focused on Greece, which will be managed by founding partner Trifon Natsis.

It also started the Global Volatility Master Fund and is planning the CMS Curve Cap Master Fund, led by Rishi Shah, which is designed to profit from expectations of higher or more volatile interest rates. — Bloomberg