Brevan Howard pulls the plug on its emerging markets fund
Wednesday 12 February 2014
One of the world's largest hedge funds is to close its $2.3bn (£1.4bn) emerging markets fund after a period of poor returns.
Brevan Howard, which is based in Geneva, has been hit as investors scale back their exposure to the developing world in the wake of the US Federal Reserve decision to taper its bond-buying programme in December.
It has parted company with Geraldine Sundstrom who ran the fund, according to reports. The portfolio invested in interest rates, currencies and bonds but lost about 15 per cent of its value last year.
Brevan Howard was founded in 2002 by five former Credit Suisse traders including Alan Howard and Chris Rokos and is best known for its $28bn Master fund, a macro hedge fund that has never had a down year and which last year gained 2.7 per cent. Last year, the group moved most of its operations of the UK with less than 200 of its 450 staff now believed to be in London.
Fears over emerging-market economies have grown ever since the US began cutting back on money printing.
Despite this, Goldman Sachs' chief executive Lloyd Blankfein claimed the developing world is better placed to weather an investor retreat now than in 1998, when currency turmoil spread and forced international bailouts.
"There were a lot of things in '98 that don't exist now," he told Bloomberg TV yesterday. "Those markets now have better reserves, more flexibility in exchange rates, better policy orientation."
He added: "What happened in 1998 wasn't the end of the world and those countries have been doing very well for the past 10 to 12 years."
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