Chris Rokos, a former top trader at Brevan Howard Asset Management, expects to raise about $1 billion for his hedge fund that’s set to start trading in the fourth quarter, according to a person with knowledge of the matter.
Rokos Capital Management will initially have the capacity to manage $3 billion, said the person, who asked not to be identified because the information is private. The 44-year-old is awaiting approval from U.K. regulators to start his London-based firm.
Rokos is courting investors three years after leaving Brevan Howard, the hedge fund he co-founded, where he had generated more than $4 billion. He’s starting out as macro funds have underperformed the industry in the last five years.
Rokos Capital’s assets will be divvied up between Rokos, Borislav Vladimirov, a former colleague at Brevan Howard, and Stuart Riley, who used to work as Asia-Pacific co-head of macro trading at Goldman Sachs Group Inc., the person said. Rokos Capital has about 50 employees and has made hires including economist Jacques Cailloux from Nomura Holdings Plc.
Once licensed, Rokos will offer clients a range of fees -- a management levy of 1 percent to 2 percent of assets and a 20 percent to 30 percent cut of profits, the person said.
A spokesman for Rokos declined to comment on the fundraising, which was earlier reported by Reuters.
Rokos faces competition for investor money as Scott Bessent, who’s been overseeing George Soros’s $30 billion fortune for the last four years, is leaving at the end of 2015 to start his own macro hedge fund.
Such funds have returned an annual average of 1.1 percent in the past five years compared with 3.7 percent for the hedge fund industry, according to data compiled by Bloomberg.
David Fear, formerly of Ziff Brothers Investments, started trading at his Thunderbird Partners this year with $1.5 billion, according to a regulatory filing, making it one of Europe’s biggest hedge fund startups.
Rokos left Brevan Howard in September 2012 after losing $383 million that year. His old firm, which oversees about $27 billion, is set to back his new hedge fund after they settled a lawsuit in January. The trader had sued Brevan Howard last year, seeking to void his employment agreement that prevented him from managing clients’ money until 2018.