Big institutions continue to take stakes in hedge fund managers

Date: Tuesday, October 9, 2007
Author: Hedgeweek.com

The summer's market turmoil has failed to cool the enthusiasm of global institutions for taking minority stakes in hedge fund managers, with giant reinsurer Swiss Re acquiring a 15 per cent stake in USD17bn London-based global macro manager Brevan Howard, reportedly from the firm's principals.

Both Brevan Howard and Swiss Re have emphasised that the stake, whose cost has not been disclosed, will not lead to the insurer taking a role in operations or asset management, although it is entitled to a board seat.

'BH Macro has today been notified that Swiss Re, the leading global reinsurer, has agreed to purchase a 15 per cent holding in the Brevan Howard group,' announced BH Macro, a Guernsey-domiciled, London-listed fund managed by the firm. 'This is a non-controlling interest and has no impact on the management of the Brevan Howard group.'

Meanwhile, a fund established by Goldman Sachs to acquire stakes in hedge fund managers has taken a 9.99 per cent shareholding in Winton Capital Management, a London-based quant manager with USD10bn in assets under management, again at an undisclosed price.

The investment is the first by the Goldman fund, which is managed by Jonathan Sorrell and is aiming to raise a total of USD500m. Winton was launched 10 years ago by David Harding after selling AHL to Man Group.

The stake acquired by the Goldman fund does not give it a seat on the board or influence over the firm's management, according to Winton, and the hedge fund manager says it does not intend to allow the fund to increase its stake.