Brevan Howard may have ended 2016 in positive territory, but a tough couple of years at Alan Howard’s hedge fund have forced it to make some radical reductions in staff numbers.
In the year to 31 March 2016, Brevan Howard cut its employee numbers by 32%, according to accounts filed on Companies House on Friday. It had 178 employees in 2015, but reduced headcount to 122 by the end of March last year. It’s also been trimming its partner staff – it had 33 members in 2016, according to a report for its LLP also filed late last week, down from 37 during the same period in 2015.
Brevan Howard’s flagship fund ended 2016 3% up, according to a recent email to clients reported by the NY Post, but has spent much of the past two years in the red. It finished 2015 down 1.96% – after its first ever loss in 2014 – and had a tough start to last year.
Brevan Howard Asset Management LLP posted profits of £16.1m for the period to 31 March 2016, down from £27.9m in 2015. Its highest paid member received £43.1m in 2016, down from £51.8m in 2015. Elsewhere, Brevan Howard appears to have been preserving pay for its rank and file staff – despite the reduction in headcount, it paid an average of £162.2k in 2016, up from £132.5k in 2015.
Towards the end of 2016, Brevan Howard started to make some senior hires. Karsten Filt joined as a portfolio manager in October from BTG Pactual, and Nick Matthews, a former senior economist at Nomura, which has disbanded its equity research function in Europe, joined as a senior economist. However, Brevan Howard ended 2016 with 74 FCA-registered staff, down from 78 in December 2015.
Odey Asset Management has also been having a tough time, but for different reasons. Odey backed the Leave campaign during Brexit and some ultra-bearish bets on the UK economy have meant its largest fund lost 49.5% of its value last year. Odey also released its accounts for the year to 5 April 2016, and its profits slumped from £83.7m in 2015 to £44.3m last year.
Despite this, Odey’s staff numbers increased from 66 to 71, and average pay remained high at £268.3k. The number of partners at the firm also remained relatively flat, but the member with the largest entitlement received £9.5m – down from £31.8m in 2015.
However, Odey is about to start cutting staff. Founding partner Crispin Odey told the Times that it is “saying goodbye to some of our people”.
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