Chris Rokos, who generated more than $4 billion as a trader at Brevan Howard Asset Management, will start his own hedge fund with the backing of his former employer after settling a lawsuit against the firm.
Rokos, who co-founded Brevan Howard with billionaire Alan Howard and three other traders in 2002, will start the fund later this year, he and Brevan Howard said in a joint statement. Brevan Howard said it will take “a financial interest” in the venture, without giving details.
The firm is likely to be the largest hedge fund startup in London this year, with bankers expecting him to raise billions as other European-based macro funds struggle, including Alan Howard’s $24 billion Master Fund and Michael Platt’s flagship fund at BlueCrest Capital Management. The settlement ends a legal headache for Brevan Howard that could have forced some of the firm’s employees, including Howard, to testify in court.
“Chris is an exceptional trader,” Howard said. “This new relationship is one from which everyone will benefit.”
Rokos, 44, sued the company last year, seeking to void an agreement that restricted him from managing outside investors’ money until 2018. Brevan Howard, which manages $27 billion, countersued to block Rokos from starting his own firm. The case was scheduled to go to trial in March in Jersey, one of the Channel Islands, where Brevan Howard is domiciled.
All of the litigation between them has been settled, according to Rokos’s spokesman, Alan Kilkenny.
Rokos retired from Brevan Howard in 2012 after losing $383 million for the Master Fund, the firm’s main pool, which trades currencies, interest rates and bonds to try to take advantage of global economic trends. He’s been trading his own money in a family office in London since then.
His best year for the Brevan Howard Master Fund came in 2011, when he made $1.27 billion, according to documents filed in the court case. Rokos also generated $1.11 billion in 2007, which accounted for 27 percent of the fund’s profit that year, as well as $549 million in 2008 and $933 million in 2009. Rokos earned about $900 million for himself since he helped start the firm, according to the documents.
Brevan Howard’s macro fund, which is managed by Howard, has struggled since Rokos’s departure, and the firm’s assets have declined from $36 billion at Sept. 30. The Master Fund fell 0.8 percent last year, its first annual loss, after rising 2.7 percent in 2013 and 3.9 percent in 2012. The pool is up 1.88 percent in the month through Jan. 16, according to a person familiar with the matter.
Rokos began working with Howard in 1998 at Credit Suisse Group AG. The first part of the firm’s name comes from the initials of founding partners: Jean-Philippe Blochet, Rokos, James Vernon and Trifon Natsis.
“I look forward to a regular dialog with Alan, something I have valued greatly ever since we started working together,” Rokos said.