Brevan adjusted fees to ensure long term commitment
Goldman Sachs reported that fundamental hedge funds experienced a significant 5% loss over a two-day period, marking one of the most substantial declines in 15 years. This downturn was primarily driven by sharp sell-offs in major technology stocks, including Alibaba, Wells Fargo, and Nvidia. The market turbulence underscores the challenges hedge funds face when heavily invested in similar assets that experience sudden devaluation.
Rob Citrone, founder of Discovery Capital Management, compared the current market environment to navigating New York City rush hour, highlighting the complexities and unpredictability investors are facing. He noted that the recent tariff turmoil has intensified market volatility, making investment strategies more challenging. This analogy underscores the difficulties market participants encounter amid fluctuating economic policies and global trade tensions.
Brevan Howard has implemented changes to its fee structures to encourage longer-term capital commitments from clients.
BH Alpha Strategies Fund: The firm redeemed approximately 15% of the assets from this $7 billion fund and introduced a new share class requiring a two-year period to fully exit investments. Previously, investors could withdraw their entire investment with three months' notice.
In an effort to manage rising expenses related to technology, infrastructure, and talent acquisition, Brevan Howard temporarily eliminated the 1% management fee for the Alpha Strategies fund. The fee is set to return to 0.5% for one quarter before reverting to 1% in April. These strategic adjustments reflect Brevan Howard's approach to balancing operational costs while incentivizing clients to commit their capital for extended periods.
FIFTHDELTA, a hedge fund founded by former Citadel managers Niall O’Keeffe and Tio Charbaghi, achieved a 9% gain in the first quarter of 2025.This performance marks a recovery from previous losses, following a strategic reduction in the fund's target volatility from 10%-15% to 7%-10%.The fund's gains were driven by successful short positions in automobile manufacturers and investments in capital-goods stocks.
Ilex Capital Partners, founded by former Citadel traders Jonas Diedrich and Dave Sutton, commenced trading on July 1, 2023, with $1.85 billion in client assets, surpassing their initial target of $1.7 billion. By July 2024, the firm was in discussions to raise an additional $1.5 billion by the end of the year. As of that time, Ilex had achieved a 10.4% return since opening to external clients.
In March, Millennium fell 1.2%, bringing its YTD loss to 2%. Citadel’s Wellington fund dropped 0.5%, down 0.85% for the year. Both struggled amid a volatile month marked by global macro uncertainty and sharp moves in tech stocks. In contrast, macro fund EDL Capital gained 14% in March, and AQR’s Apex fund rose 3.4%, now up 9% YTD.
