Deal Book The New York Times, December 23, 2010
Brevan Howard, the well-known European hedge fund firm, lost ground in November on a bet that interest rates would fall — highlighting the challenges this year for investors that trade on broad economic trends.
Brevan Howard told investors that its BH Macro Limited Fund, a listed, closed-end fund that feeds money into Brevan Howard’s flagship Master Fund, lost 0.30 percent in November. Brevan Howard’s Master Fund “suffered losses in interest rate trading, mainly in directional strategies,” during the month, according to the November 2010 monthly shareholder report.
Brevan Howard didn’t go into detail about the types of bets the fund took, but traders say the fund was betting that interest rates would fall after the Federal Reserve’s move to jump-start the economy through a second round of quantitative easing. Instead, interest rates rose on fears that QE II, as it’s known on Wall Street, would set off inflation.
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