£120m paypot for hedge fund’s stars

HIGH-FLYERS at one of Europe’s biggest hedge funds earned an average of £3.3m each last year, according to company filings.

Accounts published by the UK arm of Brevan Howard, which was set up in 2002, show 37 partners shared £120.6m in 2015.

The average pay of £3.3m was up from £1.9m the previous year when 45 partners shared a pot of £85.4million. It is thought that billionaire co-founder Alan Howard ( pictured) and other senior rainmakers would have earned far more than the average.

The Sunday Times Rich List puts Howard’s fortune at £1.5bn – making him the wealthiest hedge fund manager on the list.

The 74pc increase in average pay for the 12 months to the end of March came despite the company’s flagship fund suffering its first ever loss in 2014. The Brevan Howard Master Fund posted a loss of 0.8pc in 2014. It is thought that it racked up a second loss in 2015. But the UK division still pulled in £156.6m in fees from clients in the 12 months to the end of March 2015 – up 27pc on the previous year.

Partners at Brevan Howard operate on the standard hedge fund promise of a 20pc cut in any profits they make for clients and a 2pc fixed fee – known as the ‘two and 20’ model.

The accounts show ‘the highest paid member’ earned a staggering £51.9m in 2015, up from £31.9m in 2014. But a company spokesman claimed that the ‘member’ was actually a pool of money that is distributed to staff rather than an individual.

Hedge funds have suffered a difficult period and Brevan Howard has seen its assets under management drop from a peak of around £27bn in 2013 to about £17bn. The industry has been hit by turmoil in China and dramatic fluctuations on currency and commodity markets, and several big names have been forced to shut funds in the past year.