Brevan Howard Grooming Managers In-House as Banks Retreat

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Brevan Howard Asset Management started a training program to groom its next generation of money managers within the firm instead of relying on recruits from investment banks.

The $26.5 billion investment firm, run by billionaire Alan Howard, is targeting employees in computer-based strategies and trading assistants, said two people familiar with the matter, who asked not to be identified because the information is private. The firm will allocate a small portion of capital from its Brevan Howard Master Fund for the trainees to manage, according to one of the people.

Hedge funds traditionally recruited top traders from banks. That source dried up after lenders were forced to shutter the proprietary trading desks on which traders learned to bet on bonds, currencies, commodities and stock indexes. The $14 billion Tudor Investment Corp., one of the best-performing and oldest macro hedge funds, is responding by setting up a joint venture that will give 20 young macro traders a chance to develop skills before managing client money.

Brevan Howard enlisted Richard Oliver, a senior trader, to oversee its program, said the people. Oliver was head of short-term interest rates trading at Morgan Stanley before joining Jersey, Channel Islands-based Brevan Howard in 2013.

Five people with relevant market and trading experience have been accepted to the program in recent months, the people said. The traders will have tight limits on losses to reduce risk.

The firm, which also has offices in London and elsewhere, gained 1.9 percent in its $21.7 billion Master Fund in the first four months of this year, a person briefed on the matter said in May. Macro funds industrywide advanced an average of 2.6 percent in the period, according to data compiled by Bloomberg.

Howard, a co-founder of the firm, didn’t immediately respond to an e-mailed request for comment.

(Corrects Howard’s title in last paragraph.)
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