(Bloomberg) — Brevan Howard Asset Management’s cryptocurrency fund is currently a bright spot for the hedge fund firm, which lost money on macro trades this year.
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BH Digital, which manages around $1.7 billion of assets, returned 34.5% in the first quarter of this year, according to people familiar with the matter. That brings total gains since the fund started trading in March 2022 to nearly 51%, one of the people said.
A representative for Brevan Howard, which manages around $35 billion of assets, declined to comment.
Performance has been buoyed by the meteoric rise in cryptocurrency values, with Bitcoin up by around 50% since the end of March 2022 through the first quarter of this year. BH Digital’s gains so far this year add to a strong performance in 2023, when the fund gained 44%. It lost money in 2022.
Brevan Howard, best known for macro trading expertise, has expanded aggressively into the crypto space. It formed BH Digital in September 2021 and has since bolstered the business with capital and staff, with the division now counting over 40 team members, according to a person familiar with the matter.
The fund invests in liquid cryptocurrencies as well as relative-value and venture capital opportunities in the asset class.
Gains in BH Digital are in contrast with the lackluster performance elsewhere at the firm amid a tough macro trading environment.
Though March saw the firm paring losses on wrong-way interest rate bets incurred at the start of the year, the flagship Master Fund, which manages around $12 billion, was still down around 2% this year through April 5. The Alpha Strategies fund meanwhile, which has around $12.5 billion in assets under management, lost around 1.3% over the same period.
That compares to a 6% gain in the Bloomberg Macro Hedge Fund Index so far this year. Brevan Howard recently cut around 10% of its traders for underperformance as part of its twice-a-year review, Bloomberg has previously reported.
–With assistance from Emily Nicolle.
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