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Brevan Howard has secured an equity investment from Abu Dhabi-based Lunate, which has agreed to commit $2bn for new funds to be set up in the United Arab Emirates with the macro hedge fund.
The deal with Lunate comes as Brevan Howard co-founder Alan Howard has worked to secure outside investment as part of a long-term strategy to prepare his hedge fund for a future without him.
Lunate, which manages $110bn for investors including sovereign wealth fund ADQ, will back a set of investment funds that will feature macro and cryptocurrency trading strategies for which the $34bn hedge fund is known.
Macro trading involves making bets in global markets based on economic shifts, such as the direction of interest rates and inflation.
The firms, which did not disclose the size of the minority stake that Lunate will take in Brevan Howard, said they would seek additional capital from local and international investors.
“The long-term partnership with Lunate reflects our deep and ongoing commitment to the region and we look forward to building on this foundation over time,” said Howard, who co-founded the firm in 2002.
Lunate is owned by its three managing partners and Chimera Investment, which is part of the sprawling business empire of Sheikh Tahnoon bin Zayed al-Nahyan, the UAE’s national security adviser and chair of ADQ.
Khalifa Al Suwaidi, managing partner at Lunate, said the deal marked his firm’s expansion into hedge funds and would offer its clients “access to unique strategies to further diversify their portfolios”.
The British firm made Abu Dhabi its regional headquarters two years ago and has more than 100 staff at its offices, and the news comes after the Financial Times reported earlier this year that Howard had sought to secure an equity investment from a large investor in the region.
One of the world’s best known macro traders, Howard has sought to convince Brevan’s investors that his eponymous hedge fund can thrive long into the future without him.
He handed the reins to chief executive Aron Landy in 2019, who has worked to transform the hedge fund into something more akin to rival firms Citadel and Millennium, which are powered by teams of traders rather than a few big-name risk takers.
Brevan Howard’s two key funds have posted mixed results over the past few years.
The Alpha Strategies fund, which aims to provide consistent returns every year, was up 6 per cent to mid-August this year after two years of low single-digit returns, while the Master fund was down 1 per cent, according to a person familiar with the matter.
Additional reporting by Chloe Cornish
https://www.ft.com/content/8c3c0673-cab6-4ef0-ab93-1da030d840a9
