Pay at Brevan Howard soars

PARTNERS at Brevan Howard Asset Management, the largest hedge fund in Europe, shared a bumper payout of £86.1m at the height of the financial crisis, accounts revealed yesterday.

Around 45 members of the trading firm – including founders Alan Howard and James Vernon, and corporate investors such as Swiss Re – shared the bonus pot despite the meltdown in equity markets in the eight months to March 2009.

The pool was larger than the £66.4m distributed in 2007, although year-on-year comparison is not precise due to accounting changes.

Operating expenses for the period, including salaries, came to £605.8m.

Brevan Howard earned £700m in fees as its flagship Master fund sidestepped earth-shaking events such as the collapse of Lehman Brothers.

The Master fund generated a return of 21 per cent in 2008 after cutting its leverage by 80 per cent and moving heavily into cash. Howard, a former Salomon Brothers trader, is said to be fixated with “black swans” – unpredictable events that can send markets into turmoil – and directed his fund managers to sell off risky equity exposure in the run-up to the credit crunch.

Brevan Howard’s assets under management stand at $31.8bn (£20.6bn).