Macro Trading Firm Brevan Howard Trims Workforce Amid Underperformance
In a move to reassess its staffing needs, Brevan Howard Asset Management has reduced its trading workforce by approximately 7%, affecting around a dozen traders globally. This decision comes after two of its main hedge funds failed to match the performance of their peers last year.
A Period of Rapid Growth and Expansion
Led by CEO Aron Landy, Brevan Howard has experienced significant growth, managing $35 billion in assets, up from $6 billion in 2019. The firm’s employee base has also expanded to over 1,000, from 150 during the same period. This growth has been driven by client demand for stable and diversified returns.
The Cutthroat World of Macro Trading
Brevan Howard is not alone in trimming its headcount. Rivals such as Bridgewater Associates and Two Sigma Investments have also made similar cuts. The macro trading industry is known for its high turnover rate, with top firms competing fiercely for talent and paying top dollar to poach from each other.
Underperforming Funds
Brevan Howard’s flagship $12.2 billion Master fund returned 5.3% last year, while its $11.9 billion multistrategy Alpha Strategies hedge fund returned 2.6%. In contrast, hedge funds tracked by Bloomberg made an average return of 11% last year, with macro money pools gaining 7%. The smaller BH Digital fund was a bright spot, rising 51.3%.
Streamlining Operations
This is not the first time Brevan Howard has made significant cuts. In the first half of last year, the firm reduced its workforce by around 10%, or about 100 employees, to reduce costs and streamline its operation. Additionally, the firm shuttered funds run by star managers Alfredo Saitta and Louis Basger last year, with Saitta leaving the company.
A New Era for Brevan Howard
As the firm moves forward, it will be interesting to see how it adapts to the changing landscape of the macro trading industry. With its reduced workforce, Brevan Howard will be looking to refocus its efforts and regain its competitive edge.
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