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Brevan Howard to list BH Credit Catalysts Limited on London Stock Exchange

Thursday, October 14, 2010
Opalesque Industry Update - Brevan Howard Capital Management LP today announced the proposed listing of a new investment company, BH Credit Catalysts Limited, on the London Stock Exchange.

Fund Structure

  • BH Credit Catalysts Limited (the “Company”) will be a closed-ended, Guernsey-incorporated investment company, proposed to have a premium listing on the Main Market of the London Stock Exchange in December 2010.
  • The Company, a feeder fund, will invest substantially all of its assets in Brevan Howard Credit Catalysts Master Fund Limited (“BHCC”) an open-ended, Cayman-incorporated investment company which commenced operations in June 2009.
  • Shares will be offered to sophisticated investors and will be denominated in USD, EUR and GBP currency classes. Other currency classes may be offered subject to demand.
  • Proposed fees at Company level are an annual 2% management fee and an annual 20% performance fee, subject to a high water mark.
  • There is also a proposed annual partial capital return mechanism, which may be exercised at the sole discretion of the directors, of between 33 to 100% of annual NAV appreciation and a discount control mechanism with a 5% trigger.

Bottom-up catalyst-driven credit trading Style

  • BHCC seeks to generate high absolute returns through directional and relative value catalyst-driven trading across corporate and asset-backed credit markets.
  • BHCC has a fundamental research-driven approach and a catalyst-focused trading style (rather than “buy-and-hold” or “deep value” or “carry” basis).
  • The investment manager of BHCC seeks to maintain a high degree of diversification across credit strategies and risks. Stop losses are applied to individual trades and also at trader and fund level.

Experienced Portfolio Management team

  • The Manager of the Company will be Brevan Howard Capital Management LP (together with its affiliated entities “Brevan Howard”). Brevan Howard is one of the world’s leading absolute return managers with over US$32bn under management across 13 funds.
  • The investment manager of BHCC is DW Investment Management, LP (“DWIM”), a specialist credit manager located in New York. DWIM manages money exclusively for Brevan Howard under the supervision of Brevan Howard’s risk management team. DWIM’s credit team has a strong track record producing total return performance of: +44% in the period from May 2008 to August 2010, a period characterised by some of the most volatile markets in recent history (2008-2010).

Nagi Kawkabani, CEO of Brevan Howard Asset Management LLP, 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.”

The bookrunner to the Company’s proposed initial public offering will be Dexion Capital plc and the sponsor will be PricewaterhouseCoopers LLP.

(press release)

Brevan Howard Capital Management LP (the "Manager") will be the Manager of the Company. The Manager is a Jersey limited partnership, the general partner of which is Brevan Howard Capital Management Limited, a Jersey limited company (the "General Partner"). The General Partner is regulated in the conduct of fund services business by the Jersey Financial Services Commission pursuant to the Collective Investment Funds (Jersey) Law, 1988 and the Orders made thereunder.

As at 30 September 2010, Brevan Howard has 332 staff in offices in London, Geneva, Hong Kong, Tel Aviv, Jersey, Washington and Dublin including over 80 investment professionals: 45+ traders, 8 quantitative analysts, 12 economists/research, 4 strategists, 14 market risk specialists.

As at 30 September 2010, Brevan Howard manages US$32.2bn across, inter alia, the following funds: Brevan Howard Master Fund Limited (US$25.3bn) including its $US1.9bn listed FTSE 250 feeder BH Macro Limited; Brevan Howard Asia Master Fund Limited (US$1.7bn); Brevan Howard Equity Strategies Master Fund Limited (US$0.6bn); Brevan Howard Emerging Markets Strategies Master Fund Limited (US$2.6bn); Brevan Howard Strategic Opportunities Fund Limited (US$1.4bn); Brevan Howard Multi-Strategy Master Fund Limited (US$0.6bn); Brevan Howard Credit Catalysts Master Fund Limited (US$1.1bn); Brevan Howard Commodities Strategies Master Fund Limited (US$0.25bn); Brevan Howard Investment Fund I (US$0.4bn); Brevan Howard Investment Fund II – Macro FX Fund (US$0.8bn); Brevan Howard Systematic Trading Master Fund Limited (US$0.3bn); and Brevan Howard Global Opportunities Master Fund Limited a multi-strategy fund whose listed FTSE 250 feeder is BH Global Limited (US$1.0bn). The individual asset under management figures for each of the funds mentioned above do not sum to the total assets under management figure due to cross investments between the funds. Corporate website:

BHCC was launched as a standalone fund on 1 June 2009 and had AUM of approximately US$1.1bn as at 30 September 2010.

- FG

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