February 27, 2017 / 1:20 PM / 3 years ago

Brevan Howard listed macro fund avoids wind-down after 48 pct tender take-up

LONDON (Reuters) - Brevan Howard’s London-listed hedge fund BH Macro Limited (BHMG.L) said 48 percent of investors took up an offer to exit the fund on Friday, meaning it will avoid a wind-down.

In November, the company offered to buy back all BH Macro Limited shares at a 4 percent discount to the value of the fund’s assets unless over 66.67 percent of investors opted to redeem, which would trigger a wind-down of the portfolio.

British billionaire Alan Howard’s hedge fund Brevan Howard Asset Management, one of Europe’s largest, has struggled with mediocre returns and investors yanking cash over the past years.

After the tender offer BH Macro, which focuses on global fixed income and foreign exchange markets, will have assets of 365 million pounds. The fund’s assets had fallen to $865 million as of December 2016, from $1.5 billion a year earlier and $1.8 billion in 2014.

A spokesman at Brevan Howard, which runs $15.6 billion across its funds, declined to comment on the tender.

BH Macro made gains of 5.8 percent in 2016 after losing 0.9 percent in 2015 and an almost flat performance of 0.26 percent in 2014.

“We had been expecting a high level of redemptions given that performance in recent years has been disappointing,” broker Numis said in a note on Monday.

The note said fund fees would be far more competitive, with management fees declining to 0.5 percent from 2 percent.

“We believe the manager remains under pressure to deliver more attractive returns to investors to secure the long-term future of the fund,” Numis said.

Bloomberg reported on Thursday that Howard would oversee a new hedge fund at the firm that will be run exclusively by him from the start of March, bringing the total offshore funds to five.

($1 = 0.8049 pounds)

Reporting by Maiya Keidan; editing by Susan Thomas

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