Brevan Howard shrinks size of its London office

LONDON: Brevan Howard Asset Management, the hedge fund manager run by billionaire Alan Howard, has shrunk the size of its London headquarters, cutting back on space previously used as a gym, kitchen, meeting area and private reception, two people with knowledge of the downsizing said.

Slowing asset growth and lackluster returns in recent years have forced money managers worldwide to pare back costs. Brevan Howard didn’t renew its lease for the ground floor of the office, a move that cut the size of its rental space by more than one-fifth, the people said, asking not to be identified because the move hasn’t been publicly disclosed.

Brevan Howard will continue to rent space on the first floor of the Marylebone office building that is owned by Ian and Richard Livingstone’s London & Regional Properties Ltd, the people said.

The reduction in space doesn’t reflect any cuts to Brevan Howard staff numbers, the people said.

Spokesmen for London & Regional and Brevan Howard declined to comment.

Howard’s firm is rebounding from years of mediocre returns, with its flagship hedge fund beating peers this year after posting its worst annual performance in 2017.

Brevan Howard’s assets have slumped about 75% from their 2013 peak to about US$8bil now, as investors have fled in an environment where macro managers have struggled to make money.

In an effort to turn things around, Howard started his own fund designed to take riskier positions, a bet that paid off as the fund gained 37% in May, and allowed his top managers to run their own pools again.

Howard is also experimenting with artifi- cial intelligence, planning a fund-services business and has started a standalone crypto investment business that is called Elwood Asset Management, a separate entity to Brevan.

The Brevan Howard Master Fund climbed 9.4% this year through July, according to a newsletter seen by Bloomberg. Macro hedge funds were down 0.6% in that period, according to research firm Eurekahedge.

The building where Brevan Howard rents space was well known as the headquarters of retailer Marks & Spencer Plc until it was sold to developer London & Regional in 2005.

The hedge fund moved into the office in 2008 after a refurbishment of the building, which has around 500,000 sq ft of space and houses tenants including real estate broker Knight Frank LLP and accounting firm BDO UK LLP.