Not All Brevan Howard Hedge Funds Are Disappointing Clients

  • Securitized Products Fund returned 9.7% this year through July
  • This contrasts with losses in firm’s flagship Master Fund

Brevan Howard Asset Management LLP’s Securitized Products Fund returned 9.7 percent in the first seven months of the year, according to a person familiar with the matter.

That included a 3.9 percent gain in July, said the person, requesting anonymity because the information is private. Money manager Josh Bertman oversees the fund, which has just over $100 million in assets. A spokesman for the investment firm run by billionaire Alan Howard declined to comment.

The gains contrast with the losses that have afflicted Brevan Howard’s flagship hedge fund for most of this year. The Master Fund, which managed $7.6 billion as of the end of June, had its worst first-half decline since it began trading in 2003, only slightly mitigated by a 1.5 percent return in July that was the macro strategy’s first gain in five months.

Securitized products, which package loans such as mortgages and auto credit into bonds of different levels of risk and return, often give higher returns than other assets.

Despite the Master Fund’s performance, Brevan Howard is planning new funds focused on macroeconomic events amid speculation that a rise in interest rates will boost opportunities for profit. Hedge funds following economic trends have struggled to perform due to monetary easing and a lack of volatility in financial markets, making a fraction of the 4.4 percent returned by hedge funds generally, Eurekahedge data show.

Howard, 53, has seen the fortunes of his hedge-fund firm decline after years of poor performance. The Master Fund’s assets have slumped from almost $28 billion in 2013, investor letters show.

The hedge-fund industry overall is showing more signs of life, attracting $21 billion in inflows in the first half, according to eVestment.

— With assistance by Alastair Marsh

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