This secretive hedge fund boss topped UK’s hedge fund rich list this year
Co-founder of hedge fund Brevan Howard Asset Management Alan Howard’s personal fortune increased 44% over the past year to 1.4 billion pounds ($2.3 billion), putting him at the top of the wealthiest UK hedge fund manager list.
Alan Howard (Net Worth $2.3 Billion)
Wealth: Hedge fund Brevan Howard
Residence: Geneva, Switzerland
Country of Citizenship: United Kingdom
Education: Master of Science (Chemical Engineering), Imperial College London
Co-founder of hedge fund Brevan Howard Asset Management Alan Howard’s personal fortune is $2.3 billion
His net worth was boosted by the 12 percent gain posted in 2011 by Brevan Howard’s biggest hedge fund, the $26 billion Master Fund. The investment performance helped London-based Brevan Howard generate $1.5 billion of fees, most of which went to Howard, 48, the Sunday Times said in a statement today.
Hedge Fund Manager Role at Brewn Howard
About Brevan Howard and Investment Strategy
Brevan Howard was established in 2002 by Alan Howard and Jean-Philippe Blodget and two other co-founders. The fund has almost $61.5 billion in assets under management making it the biggest hedge fund in the world. The company based in London, United Kingdom and also has offices in Dublin, New York, Jersey, Tel Aviv, Tokyo, Hong Kong, Bermuda, Washington and Mumbai. It currently employs about 60 traders in various positions around the world.
The dominant investment style of Brevan Howard funds is Global Macro. Global Macro is a strategy that takes the global macroeconomic scenario into account and uses current variables to predict future trends. This style is fast gaining momentum in the financial world, since it bases its forecasts on evident economic indicators and uses rational economic theory to predict trends.
Alan Howard, by nature is a pessimist. Synonymous with Alan, Brevan Howard is also famous for its careful dealings, as it is a well-known fact that the company does not deposit cash for savings at investment banks. In fact, Brevan Howard chooses to deposit liquid securities such as T-Bill with various custodian banks. This is to eliminate any chances of being caught in bank run and put cash deposits on the line.
Howard is also a contrarian. He chooses to question popular opinion rather than rely on them. His strength lies in questioning and analyzing the reasons behind expert opinions. At the end of 2010, the grapevine had it that the recession was almost at its end and the global economy would be on its path to recovery in a short frame of time. Howard on the other hand, predicted that the economy would worsen before it improved and took a position on the market based on his expectations. 2011 rewarded him with immense returns; while portfolio values all around were crashing, Brevan Howard’s funds recorded positive rates of return.
However, like other investors, Alan Howard’s expectations often do not turn out to be true. In those cases, his behavior is aptly described by his colleague, Chris Goekijan in the following words: “He gets it right more than he gets it wrong, but the important thing is that when he does get it wrong, he cuts very quickly.” As a result, Howard’s main strength is cutting losses as efficiently as possible in inefficient markets to reduce downside risk.
In line with his own ideology, Howard has high expectations from the traders at Brevan Howard as well. The traders are provided with written agendas directing them to steer clear of certain markets as well as providing guidance on use of instruments along with a maximum capital allocation in favorable markets. Traders who are able to successfully implement strategies are rewarded with performance related bonuses and an increased proportion of the portfolio.