Brevan Howard Asset Management has launched a UCITS III-compliant version of its flagship global macro hedge fund, the firm's fourth foray into the regulation-friendly retail space.
The Brevan Howard Investment Fund-Absolute Return Macro Fund began trading last week, seeded by the firm with £100 million. The new fund is designed to replicate the long-term views of the Brevan Howard Master Fund, but will not track that fund's short-term investments in illiquid derivatives and options.
"It will only replicate the longer-term structural views of the master fund and will stay in liquid futures, swaps and FX forwards," CEO Nagi Kawkabani told HFMWeek.
"To the extent that a lot of the returns of the master fund are being explained by long-term views, then it will track well," he added. "If the returns of the master fund are being generated by options and short-term trading, then it won't reflect the returns of the master fund."
That may prove a disappointment to investors seeking access to the Master Fund through the UCITS fund. The US$24 billion flagship is currently closed to new money.
Brevan currently manages two other UCITS products. Europe's largest hedge fund runs what it believed to be the largest UCITS hedge fund, Macro FX, and launched an emerging markets rates and foreign exchange fund in September. Earlier this year, Brevan shuttered its first UCITS-compliant vehicle, a bond fund launched in 2008 by a team recruited from Aberdeen Asset Management.