Brevan Howard Asset Management LLP, the hedge-fund company run by Alan Howard, said it will return capital to some investors in its biggest hedge fund after assets rose to about $27 billion.
Shareholders in BH Macro Ltd. and BH Global Ltd., which are publicly traded companies that feed capital into the Brevan Howard Master Fund, won’t be affected by the decision, the Guernsey-based companies said in a statement today. Money will be given back to “certain” Brevan Howard investors, the statement said.
Investors in the master fund have said they want assets to remain at about $25 billion to ensure its performance, prompting the London-based hedge fund to consider returning about $2 billion to clients, Brevan Howard Chief Executive Officer Nagi Kawkabani said in a Sept. 20 interview. Assets increased after the hedge fund posted investment gains of more than 12 percent this year through September.
Brevan Howard may pick and choose which clients get their money back, or it could return money to investors on a pro rata basis. The statement released today indicates that not all clients will get money back.
Hedge funds often restrict the size of their funds to make sure they can continue to find profitable investments. SAC Capital Management LLC, Caxton Associates LP and JAT Capital Management LP have all told clients in recent months that they want to limit size because they see fewer opportunities to make money.