Brevan Howard Flagship Hedge Fund Has Worst First-Half Loss

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Brevan Howard Fund Has Worst First-Half Loss

Brevan Howard Asset Management LLP’s main hedge fund suffered its fourth straight monthly loss in June, slumping 1.5 percent, according to an investor letter seen by Bloomberg News.

The decline pushed the macro hedge fund down 5.2 percent this year through June, the worst loss for a first half since it began trading in 2003, the letter showed. By comparison, hedge funds following economic trends to bet across asset classes were flat, according to preliminary data from Eurekahedge.

A spokesman for the investment firm run by billionaire Alan Howard declined to comment.

Macro hedge funds have struggled to live up to investors’ expectations that the prospect of interest-rate normalization at the Federal Reserve would increase money-making opportunities for traders. The funds raised $13.8 billion this year through May, the most by any strategy, according to industry tracker eVestment. But their recent poor performance may test investors’ resolve.

Howard, 53, is fighting to reverse client withdrawals. The Brevan Howard Master Fund managed $8.2 billion at the end of May, down from almost $28 billion in 2013, investor letters show. The main hedge fund returned 3 percent in 2016, its first annual gain in three years, according to an investor letter. The fund lost 0.8 percent in 2014 and almost 2 percent in 2015.

Macro funds rose just 1.2 percent on an asset-weighted basis in the first five months of the year, the least among the main strategies tracked by Hedge Fund Research Inc. Equity and "creative financing" strategies, such as direct lending, are among the most attractive this year, said Darren Wolf, head of hedge funds for the Americas at Aberdeen Asset Management. The money manager is still positive on macro hedge funds because it expects "more volatility around the corner," Wolf said.

Read more on Aberdeen’s view of hedge funds here

— With assistance by Hema Parmar

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