- Global reductions represent about 10% of total employees
- Hedge fund firm's assets have shrunk 11% in first nine months
Brevan Howard Asset Management, the $24.8 billion hedge fund firm run by billionaire Alan Howard, eliminated about 50 jobs amid shrinking assets and near-zero returns this year, according to people familiar with the matter.
The reduction represents more than 10 percent of the 435 employees Brevan Howard had as of June 1.
“We have had to reassess our staffing needs, predominantly in back and middle office support functions, in light of our decision to focus on our core macro business and shut or spin off non-core funds over the last 12 to 18 months,” the firm said in an e-mailed statement.
Brevan Howard’s assets shrunk 11 percent in the first nine months of 2015, a year marked by lackluster returns and fund closures as macro managers struggle to navigate markets. Earlier this year, the firm spun out credit funds run by David Warren and last year shuttered emerging markets and commodities pools. Brevan Howard’s main fund has gained 0.2 percent this year through September, according to an investor update.
Earlier this year seven employees including Mark Hillery and Gertjan Vlieghe left the firm, according to company filings. Partner Vinay Pande, who oversaw the Brevan Howard Strategic Macro Fund out of New York, and his team are also departing, two people familiar with the matter said last month.
Howard co-founded Brevan Howard 13 years ago with colleagues from Credit Suisse Group AG. Assets peaked at $40 billion in 2013, the year before the firm’s main fund posted its first annual loss.
The asset decline comes as Brevan Howard co-founder Chris Rokos, who Howard described as an “exceptional trader,” started his own hedge fund at the end of September. His fund got more than $500 million from New York-based private-equity firm Blackstone Group.
Macro hedge funds have lost 0.9 percent this year through September, according to data compiled by Bloomberg. Macro funds run by Fortress Investment Group LLC and Bain Capital were forced to close amid losses.
Brevan Howard, which seeks to profit from macro-economic trends, said in the statement that policy divergence between the U.S. and the rest of the world, which it had anticipated for mid 2015, “looks imminent.”
“We believe that once it starts we may well get the market dislocations in which macro trading thrives,” it said. "We want to ensure that we are correctly focused, and staffed, to take advantage of the anticipated opportunities."
The firm has added traders this year including Scott Eichel and Michael Lyublinsky from Royal Bank of Scotland Group Plc. Brevan said in the statement that it hired Pravin Mouli from Barclays Plc and Roberto Hoornweg from UBS Group AG in the last 12 months.
Brevan Howard, which is based in St. Helier on the island of Jersey, has offices in London, Geneva, New York, Hong Kong, Tel Aviv and Washington.
(An earlier version of this story corrected the number of job cuts and the percentage of positions eliminated from the total.)