Hedge fund Brevan Howard cuts 10% of staff amid poor performance

Macro hedge fund Brevan Howard is cutting about a hundred jobs amid a period of poor performance at the firm.

Brevan, which manages about $35bn in assets, is shedding just under 10 per cent of its 1,100-person workforce, according to a person with direct knowledge of the matter.

About 80 per cent of the cuts are in middle- and back-office roles, while most of the remaining 20 per cent are in systematic trading, which uses computer and data to make winning bets.

The firm axed about 10 per cent of its traders last month as part of a semi-annual performance review, the person added.

“A comprehensive review was conducted of the business, mainly of the infrastructure supporting the front office business,” the person said. “That exercise is still under way and being completed today.”

“They overhired back in 2022 and early 2023 and returns haven’t been great so far, so it’s not a surprise that they are trimming down,” said one person with close ties to the firm.

The cuts were needed after a period of rapid growth over the past few years, the first person said, as the firm grew from a low of $6bn in assets in 2019.

Macro hedge funds make money by taking bets on the economy and interest rates though bond, FX, commodities and equities markets. Brevan Howard, which was co-founded by billionaire Alan Howard, has suffered a sustained period of poor performance since the start of 2023.

The Brevan Howard master fund gained 20 per cent in 2022, when macro funds thrived during a period of rapid interest rate rises.

But it was wrongfooted by markets in March 2023, as Silicon Valley Bank collapsed and the cycle of interest rate rises abruptly stopped, and shed almost 2 per cent in 2023. By early April, it was down about 2 per cent for the year so far.

A rival macro hedge fund managed by Chris Rokos, a co-founder of Brevan Howard, gained 9 per cent last year, and made a billion dollars at the start of this year betting that US interest rates would not fall as quickly as the market expected.

Brevan Howard’s 1,100 staff are spread across offices in London, New York, Jersey, Abu Dhabi and Singapore, according to its website. It has about 160 portfolio managers.

The job cuts were first reported by Bloomberg.