Brevan Howard Tops Goal in $1 Billion Hedge Fund IPO

Date: Friday, May 23, 2008
Author: Edward Evans, Bloomberg

Brevan Howard Asset Management LLP raised $1 billion in an initial public offering of a hedge fund, double its original target.

The firm, which oversaw $23.8 billion at the end of March, sold 70.8 million shares of Guernsey, U.K.-incorporated BH Global Ltd., Brevan Howard said in a statement today. The shares were priced at $10, 10 euros ($15.70) and 10 pounds ($19.80) each.

Brevan Howard, founded in 2002 by Alan Howard, the former head of proprietary interest-rate trading at Credit Suisse Group, also raised about $1 billion in March 2007 with an IPO of BH Macro Ltd., the first listing of a hedge fund on the London exchange. That fund has risen 41 percent in London trading since the shares were sold to the public last year.

``To have raised $1 billion in these markets is a great result and certainly beyond our initial target of $500 million,'' BH Global Chairman Andrew Turnbull said in the statement.

Selling shares to the public allows hedge funds to raise money without worrying about client redemptions. BH Macro invests in Brevan Howard's $18.5 billion macro fund, which endeavors to make money chasing macroeconomic trends by trading stocks, bonds, currencies and commodities.

The macro fund climbed 13.3 percent in the first quarter, helped by bets that the U.S. dollar would tumble against most major currencies and the difference between short-term and long- term interest rates in the U.S. would increase.

Macro funds, on average, climbed about 4 percent in the first quarter, according to Chicago-based Hedge Fund Research Inc.

The BH Global Fund will invest in five Brevan Howard funds including the macro fund, an equity fund and an emerging markets fund. The new shares will begin trading on the London Stock Exchange's main market on May 29.

To contact the reporter on this story: Poppy Trowbridge in London at ptrowbridge@bloomberg.netEdward Evans in London at at eevans3@bloomberg.net