Brevan Howard Said to Close Commodity Hedge Fund After Losses

Brevan Howard Said to Close Commodity Hedge Fund After Losses
A security guard stands outside 55 Baker Street, the building housing the offices of Brevan Howard Asset Management LLP, in London. The firm earlier this year shuttered an emerging-markets fund run by Geraldine Sundstrom and last year closed a currency fund overseen by Luke Ding. Photographer: Chris Ratcliffe/Bloomberg

Brevan Howard Asset Management LLP, the hedge-fund firm that oversees $37 billion, is shutting its commodity hedge fund run by Stephane Nicolas after losses this year, according to two people with knowledge of the matter.

The fund, which had about $630 million in assets under management, has fallen about 4.3 percent this year through the end of October, said one of the people, who asked not to be identified because the information is private.

The commodity fund had slumped 10.3 percent in September before making back some of the losses. An official for Brevan Howard declined to comment on the fund’s closure, which was reported yesterday by the Wall Street Journal.

Nicolas’s hedge fund joins a number of single-strategy funds run by Brevan that have liquidated in recent years. The firm earlier this year shuttered an emerging-markets fund run by Geraldine Sundstrom and last year closed a currency fund overseen by Luke Ding. In 2011, Brevan shut an equities fund that was managed by Fabrizio Gallo, CNBC reported at the time.

About 461 hedge funds liquidated in the first half of the year after 904 shuttered in 2013, according to data from Hedge Fund Research Inc. Last year’s total was the highest since 2009. Other funds that have closed in the last two months include Hall Commodities LLP in London, Kingsguard Advisors LP and Anderson Global Macro LLC, both macro-economic firms in New York.

The Bloomberg Commodity Index, made up of 22 raw materials, has tumbled 10 percent this year through November amid expanding supplies. The Organization of Petroleum Exporting Countries last week agreed to maintain its collective output target at 30 million barrels a day, sending benchmark oil prices to their lowest in four years.

Brevan, based in St. Helier on the island of Jersey, was started by Alan Howard in 2002 with four members of a proprietary fixed-income trading desk at Credit Suisse Group AG.

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