Brevan Howard Shows Paranoid Survive in Hedge Fund of Time Outs

Brevan’s success contrasts with the disarray of the rest of the hedge fund industry. The average 19 percent loss among hedge funds was the industry’s worst performance since at least 1990, according to Chicago-based Hedge Fund Research Inc. Macro funds did better, returning 4.7 percent on average after fees.

Investors yanked an estimated $154.4 billion out of hedge funds last year, sending assets down to $1.41 trillion from a peak of $1.93 trillion in the second quarter of 2008.

Risk aversion colors every facet of Brevan Howard’s operation, from the redundant power systems in its offices to the Master Fund’s early use of multiple prime brokers to spread its risk. And Brevan won’t park cash with investment banks; it deposits its T-bills with custodial banks such as Bank of New York Mellon Corp.