Jewish-British billionaire and philanthropist Alan Howard has closed Brevan Howard’s office in Israel. The closure means Brevan Howard now has seven offices globally.
Brevan Howard is one of the world’s largest hedge funds and the only one with offices in Israel with dozens of employees working mainly in foreign currency, interest and bonds and some engaged in R & D.
The company’s flagship fund specializes in global-macro strategies, which base its investments on economic data and their impact on assets such as bonds, stocks, commodities, and currencies.
The fund made its way to the top of the world when it realized about 80% of its investments before the global financial crisis in 2008 and managed to avoid losses. In 2008, the fund yielded a 21% return, while most of its competitors fell.
In 2013, Howard managed $40 billion in assets and was, in fact, Europe’s second-largest hedge fund and one of the world’s largest hedge funds.
In recent years, however, the fund has suffered significant losses from poor performance, with its managed assets shrinking to only $8.5 billion. At the same time, the fund suffered from the departure of senior officials, the last of which was the investment manager, Luigi Boutlionion.
According to figures published in Financial News London, the fund yielded a negative 5.4% return in 2017, “the worst year since the fund was launched in 2003.”
In fact, the fund has had a negative yield in three of the past four years. Bloomberg cited a source who said that in the first quarter of 2018, the fund yields only 0.2%.
The fund’s poor performance is related, inter alia, to the low-interest-rate environment that prevailed in most of the world markets in recent years, as well as to the relative volatility that characterized the markets in 2012-2017.
According to reports, in recent years Barwa has closed six different hedge funds in order to focus on its flagship fund.
The new investment: Bitcoin
The closing of the branch in Israel was intended to reduce costs, with the aim of reviving Howard’s activity. According to Financial News London, the fund is “implementing additional cost-saving measures this year, including a 50-employee cut in the world, and plans to outsource all operational and administrative services at the Jersey headquarters.”
Brevan Howard is currently working on setting up a new investment fund in Asia.
Howard, 54, a former trader at Salomon Brothers investment house, founded Brewan Howard in 2002 along with four former Credit Suisse bond dealers.
He is one of Britain’s richest people. His personal fortune was estimated at £1.4 billion ($2.2 billion) in 2012, according to The Sunday Times, and in 2018 Forbes estimated his fortune at $1.35 billion.
It was recently reported that Howard made large investments in 2017, in cryptographic currencies such as Bitcoin, and plans to make additional investments in digital assets and the Blockchain technology.
Howard decided to close the foundation’s activities in Israel, despite his warm ties in Israel. Howard founded the Alan Howard Charitable Foundation to support Israel and other Jewish causes around the world.
The foundation focuses mainly on Holocaust education, support for the underprivileged and support for Israeli cinema. In the past, Howard also served as a director of the Conservative Friends of Israel.
In 2007, Howard purchased two adjacent lots in Herzliya Pituah in Israel, for which he paid $21 million at the time.