The Brevan Howard Master Fund was one of the star performers during the credit crisis but is now in its third straight calendar year of losses.
It has struggled recently as bond markets have proved tough to predict. The withdrawals in the first six months of this year are according to letters to investors and calculations by The Wall Street Journal. The fund now has $ 15.7 billion under management, the letters said.
A spokesman for Brevan declined to comment.
The withdrawals at Brevan, which is headed by Switzerland-based billionaire Alan Howard, mean the firm’s assets have now more than halved in the past two years, from around $ 42 billion to $ 19.4 billion. It has shut commodities and emerging markets funds in recent years, and also spun out its credit funds unit.
Funds in the $ 2.9 trillion hedge fund sector experienced more than $ 23 billion of net withdrawals in the first half of this year, according to Chicago-based data group Hedge Fund Research.
Like most so-called “global macro” hedge funds, which trade bonds, currencies and stocks, Brevan has struggled in recent years to cope with markets dominated by central bank money-printing. This has flattened yield curves and suppressed volatility in bond markets, making it harder for such funds to profit.
Brevan was also caught out by the European Central Bank’s lower-than-forecast stimulus package in December, which hit funds betting on a weaker euro. However, it was among funds to profit after the UK’s shock vote to exit the European Union in June.
Macro funds on average are up 3.7% this year, but lost money in four of the previous five calendar years, according to HFR.
Brevan’s main fund gained 25% in 2007 and 20% in 2008 but suffered its first-ever calendar year loss in 2014, falling 0.8%, while last year it lost 2%. This year the fund is down 2.25% to the end of July.
Last year the Journal reported that Brevan planned to cut at least 10% of its workforce. Staff numbers have dropped from around 460 in 2014 to around 350 currently, said a person familiar with the firm.
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This article was published by The Wall Street Journal