Billionaire hedge fund manager Alan Howard, who predicted there will be “exceptional opportunities” to make money this year, in February beat peers who were whipsawed by volatile markets, according to two people with knowledge of the matter.
A gain of 0.5 percent in February boosted Howard’s $18.6 billion Brevan Howard Master Fund’s return to just over 1 percent for the first two months of the year, said the people, who asked not to be identified because the information is private. A spokesman for Brevan Howard Asset Management declined to comment.
Global macro hedge funds, which bet on economic trends, lost almost 3 percent in February, according to initial estimates from Lyxor Asset Management. That brought the loss for the first two months to 2.3 percent.
Howard, who suffered second successive annual declines in his main hedge fund last year, said in January that divergent monetary policies and rising market volatility would "materially improve" money-making opportunities for his firm. The fund lost almost 2 percent last year and 0.8 percent in 2014, people familiar with the matter said in January.
The prospect of China’s stock-market volatility spreading to other countries, along with a broader global economic slowdown, led to sell-offs in crude oil, stocks and emerging-market currencies and wider credit spreads. That’s making it difficult for hedge fund managers to make money.
Macro hedge fund managers incurred losses in the first half of February on trades such as long inflation, short U.S. bonds and long U.S. dollar, forcing them to cut exposure, said Anthony Lawler, a portfolio manager at GAM Holding AG.
"These positions recovered somewhat into month-end, but most managers were running lower risk and so did not fully recover," Lawler said.