The fund, a feeder fund, will invest all its assets into the firm’s successful $1.1bn Cayman-based Brevan Howard Credit Catalysts fund. The open-ended fund was launched in June 2009 and is managed by New York-based credit specialists DW Investment Management.
Shares in the new fund will be offered to sophisticated investors in euro, dollar and sterling denominations and Brevan Howard said other currency options may be offered subject to demand.
The fund aims to generate high absolute returns through directional and relative value catalyst-driven trading across corporate and asset-backed credit markets. The company has a fundamental research driven approach and catalyst driven trading strategy. It added it seeks to maintain a high degree of diversification across credit strategies and risks and applies stop-losses to individual trades and also at the trader and fund level.
There will be an annual management fee of 2% and an annual 20% performance. The company has also proposed an annual partial capital return of between 33% and 100% of annual NAV appreciation, at the discretion of the fund’s directors.
Commenting on the listing, Bevan Howard Asset Management CEO, Nagi Kawkabani said: “We believe investors will respond well to this opportunity. The credit market is large and there is not enough risk capital available. Brevan Howard therefore believes that the opportunity set within credit markets for a trading strategy is significant.
“The DWIM credit team has generated consistently positive returns (quarter-on-quarter) since April 2008 across a wide range of market conditions. The team’s strategy (applied to BHCC since June 2009) has acted as a diversifier to other credit strategies by demonstrating a low correlation to credit market movements.
“As a listed feeder fund of BHCC, BH Credit Catalysts Limited should allow a wider range of investors access to this hedge fund credit strategy.”
