Hedge fund Brevan Howard is clearing the decks. Luke Ding, head of Brevan’s investment fund II Macro FX and a former Merrill Lynch trader, is said to be one of a handful of traders leaving the leading London-based hedge fund following a biannual performance review. Ding’s departure is said to be amicable, but the fund he managed is said to have under-performed. Should Brevan’s clear-out be taken as a warning to sign to top traders from investment banks who still flock to work there?
Brevan Howard was unable to provide anyone to comment for this article, but the fund has a reputation for dealing harshly with under-performance which originated in a Bloomberg article from 2009. Our own research, based upon the LinkedIn profiles of fourteen Brevan Howard employees in 2011, subsequently suggested that the average tenure at the fund was around 24 months. Current figures from the U.K. Financial Conduct Authority (FCA) register show that of the 92 Brevan Howard employees currently registered in London, over 40% have joined since the start of 2011. More worryingly, of 20 registered employees to leave Brevan Howard in London since the start of 2012, only three have so far resurfaced in other UK-based roles.
Does this mean Brevan is the end of the line for illustrious trading careers?
Not necessarily. As we’ve observed before, Brevan Howard has been shunting people off to its office in Geneva. At least four of the seventeen traders who’ve disappeared from Brevan Howard in London this year are said to have resurfaced in Switzerland.
Something does seem to changing with regards to careers post-Brevan Howard, however. Before the Volcker Rule banned investment banks from proprietary trading, ex-Brevan staff like Fabrizio Gallo rejoined investment banks after a few years at the fund. However, the FCA Register shows that all three people who’ve left Brevan Howard for new London jobs since 2012 have joined hedge funds: Charles Hyde-Andrews-Bird went to Och Ziff in February, Arash Mahdavi went to Salix Capital in February 2012, and Thomas Maloney went to AQR in June 2012. No one has gone from Brevan Howard back into banking since August 2011.
Brevan Howard does seem to be a career dead end, therefore – but only if you want to go from Brevan back into investment banking. And few people are likely to aspire to that kind of move these days.