Billionaire hedge fund manager Alan Howard says there will be “exceptional opportunities” to make money in 2016 because of divergent monetary policies and as four years of low market volatility comes to an end.
A slowdown in global growth appears to be accelerating and if the trend continues central banks could find it increasingly difficult to support capital markets, Howard, 52, wrote in a letter to shareholders in BH Macro, a listed fund that invests in Brevan Howard Asset Management’s main macro hedge fund.
“Some exceptional opportunities are likely to present themselves in this environment of regime shift and dislocation,” Howard said in the letter released Friday.
Investors began allocating more money to macro hedge funds last year, ahead of the US Federal Reserve’s December rate hike which created more trading opportunities for the money pools. A net $33.6 billion was allocated in 2015 to macro funds and mathematical models that use economic trends and volatility to bet across asset classes, compared with $30 billion of net withdrawals a year earlier, according to Eurekahedge.
Brevan Howard’s flagship master fund suffered a record monthly loss in December as markets were roiled after the European Central Bank announced a smaller-than-expected stimulus package. The fund ended the year down 2 per cent, its second successive annual decline, a person familiar with the matter said this month.
The Brevan Howard Master Fund dropped 3.9 per cent last month, exceeding the fund’s previous record monthly drop of 3.2 per cent in September 2008, a person familiar with the matter said in January.