Brevan Howard Said to Liquidate Argentina Fund After 18% Return

  • Fund was started in 2014, had more than $500 million assets
  • Fund winding down after Argentina resolved creditor dispute

Brevan Howard Asset Management LLP is closing down its dedicated Argentina fund after the country resolved a legal dispute with creditors that had pushed the nation into default.

The Argentina Master Fund produced net returns of 18 percent since it was opened to outside investors in January 2015, when the nation was in the midst of its second default in less than two decades, according to people with knowledge of the matter. The fund was designed to profit from a political transition and close once Argentina implemented market-friendly policies including allowing its currency to float and curing the default, said one of the people, who asked not to be named because the matter is private.

A spokesman for Brevan Howard declined to comment.

Brevan Howard, which oversaw about $18 billion in assets as of the end of March, was among a slew of hedge fund firms that bet Argentina would eventually overcome its dispute with creditors and return to international bond markets. Their hopes were realized after President Mauricio Macri came to power late last year and immediately began to unwind his predecessor’s policies. The nation struck a deal with the holdout creditors in February, returned to global bond markets in April, and cured the latest default this month.

Brevan Howard’s fund had more than $500 million in assets including Argentine stocks, bonds, and warrants tied to economic growth. It was run Brevan Howard partner Ben Melkman, said one of the people.

Brevan Howard will finish returning cash to investors in coming weeks.

The fund’s returns are a bright spot for the firm, whose flagship fund is down 1.8 percent for the year after losing 2 percent last year, according to people familiar with the matter.

Argentina’s holdout creditors, led by Paul Singer’s Elliott Management, held bonds left over from the nation’s $95 billion default in 2001 and persuaded U.S. courts to block payments on debt issued in the nation’s two debt restructurings until their notes were repaid. Macri struck a deal to pay the holdouts in February for $4.65 billion, allowing for the nation to resume making bond payments.

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