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Business News/ News / Brevan Howard Cuts More Than 100 Staff in Restructuring Push
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Brevan Howard Cuts More Than 100 Staff in Restructuring Push

Brevan Howard Asset Management is cutting around 10% of its workforce — or about 100 employees — to reduce costs as one of the world’s best known hedge funds streamlines its rapidly growing operation.

Brevan Howard Cuts More Than 100 Staff in Restructuring PushPremium
Brevan Howard Cuts More Than 100 Staff in Restructuring Push

(Bloomberg) -- Brevan Howard Asset Management is cutting around 10% of its workforce — or about 100 employees — to reduce costs as one of the world’s best known hedge funds streamlines its rapidly growing operation.

The cuts include about 20 traders and are mostly focused on back-office and technology staff, according to a person with knowledge of the matter. Brevan Howard employs more than 1,100 people across eight trading hubs in London, New York, Abu Dhabi, Hong Kong and elsewhere. 

The restructuring, which follows a review of the business and affects staff globally, is currently underway and was disclosed to employees on Thursday, the person said asking not to be identified because the details are private. The reductions are in addition to about two dozen traders the firm cut last month and will leave it with about 170 risk takers, the person added. Traders cut during the latest round mostly ran systematic strategies.

The hedge fund firm is also considering a plan to shutter its Paris office as part of the restructuring, another person said. 

A representative for Jersey-based Brevan Howard declined to comment.

Brevan Howard’s flagship Master Fund, which manages around $12 billion, was down around 2% this year through April 5. The Alpha Strategies fund meanwhile, which has around $12.5 billion in assets under management, lost around 1.3% over the same period. Still, the firm’s $1.7 billion digital asset fund returned about 35% in the first quarter of this year.

The firm has grown rapidly under Chief Executive Officer Aron Landy, bolstering businesses such as credit, digital assets, systematic and commodities along with its core macro trading expertise. That coincided with a turnaround at Brevan Howard which had seen assets shrinking to about $6 billion in 2019 from peak of more than $40 billion in 2013. 

Assets have since bounced back to about $35 billion with headcount growing from 150 in 2019. Despite the latest cuts, the firm continues to add traders in areas from digital assets to commodities.

Booming Business

Brevan Howard’s move is another sign that some hedge fund giants are closely looking at their cost base and proactively trying to rationalize expenses after a period of explosive growth.

Brevan Howard, where dozens of traders invest across assets classes, is among the funds that have benefited from investor migration to multi-manager investment firms in search for stable and diversified returns. The growth in assets have led to those firms competing fiercely for talent, paying top dollar to poach star traders from each other and investing back in the business.

That has inflated cost across the industry, all paid for by investors. Clients received 41 cents of every $1 made by multistrategy funds that passed on all their costs last year, according to a survey by the prime brokerage unit of BNP Paribas SA.

Others who have been cutting jobs include Walleye Capital which is dismissing about a dozen employees, including the head of its global discretionary macro business, as its restructures operations, Bloomberg News has reported. Back in November, Schonfeld Strategic Advisors eliminated 15% of its workforce to cut costs after abandoning talks for a potential partnership deal with Izzy Englander’s Millennium Management, Bloomberg News has reported.

--With assistance from Peter Eichenbaum.

(Updates with plans to close Paris office in fourth paragraph.)

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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Published: 19 Apr 2024, 12:24 AM IST
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