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BH Global Limited - Sale from Treasury

·4-min read

BH Global Limited
(the "Company")
(a closed-ended collective investment scheme established as a company with limited liability under the laws of Guernsey with registered number 48555)


Investment Management Agreement

22 January 2021


The Board of Directors of BH Global Limited notes the receipt this morning of a letter from the General Partner of its manager, Brevan Howard Capital Management Limited, the text of which is set out in full below. The Board will consider the matters raised therein, and make any further announcement as appropriate in due course.

Letter from Brevan Howard Capital Management LP to BH Global Limited

The Board of Directors (the “Board”)
BH Global Limited (the “Company”)
PO Box 255
Trafalgar Court
Les Banques
St Peter Port
Guernsey GY1 3QL
Channel Islands

22 January 2021

Dear Directors

Further to discussions between us which started in the first half of last year, we write to set out clearly our position as the manager (the “Manager”) of the Company.

Since its launch in 2008, the Company has had a strong track record, performing similarly to equity markets with significantly lower volatility and with a history of delivering higher performance when equity markets have declined. Since launch until the end of 2020, the largest share class of the Company has had an annualised rate of return of 5.5%, an information ratio of 0.92 and a total return of 96.2%, with an annualised volatility of 5.9%. Over the same period1:

  • MSCI World Index had an annualised rate of return of 6.7%, an information ratio of 0.4 and a total return of 126.1%, with an annualised volatility of 16.8%.

  • The FTSE 100 had an annualised rate of return of 4.2%, an information ratio of 0.29 and a total return of 68.6%, with an annualised volatility of 14.3%.

The Company has exhibited low correlation to other asset classes, creating true diversification for portfolios, a quality that was amply demonstrated during the market turbulence of 2020. The Company offers investors unique access, via Brevan Howard Multi-Strategy Master Fund Limited (the “Master Fund”) to a range of the world’s leading hedge funds and portfolio managers, an opportunity which has demonstrated its quality over more than a decade.

As the Board will be aware from recent discussions and meetings, we have invested heavily across a number of areas in building Brevan Howard in recent years as we look to invest for the future and seek to maintain and develop an industry-leading business. While we continue to invest significantly in attracting and developing the best possible talent and also strengthening our technology, systems and infrastructure that support them, it is essential that we are supported by all of our investors, via their respective fee structures, to maintain the quality of our platform. Noting the exceptional performance of the Master Fund, the substantial ongoing investment and the increasingly competitive environment, we have concluded that the management fee concessions agreed in 2016 and 2017 no longer support the future success of the Company. We therefore propose that these concessions be withdrawn and the fixed component of the fee paid to the Manager is adjusted back to its prior level of 2% per annum, the fee level that was paid by the Company from 2014.

These terms (the “Proposed New Terms”) represent the minimum level for us to continue to manage the Company as we build for the future in competition with our industry peers. We believe that the reversion of the fixed fee to the level that applied previously will give us the needed flexibility to manage and grow the Company.

We request that the Board convene an extraordinary general meeting (“EGM”) of shareholders as soon as practicable to consider approving the Proposed New Terms by way of a notice of EGM with a circular setting out details of the proposal (the “Notice and Circular”). We would welcome the opportunity to work with the Board and its advisors to assist in the production of the Notice and Circular.

In the event that the Notice and Circular are not published on or before 17 February 2021, except in the case of delay attributable to any necessary regulatory steps being completed, the Manager intends to serve notice of termination of the Management Agreement with the Company and the Company’s investment in the Master Fund will be redeemed.

The implementation of the Proposed New Terms will allow us to strengthen and grow the Company. We sincerely hope that shareholders provide support to the Proposed New Terms and permit us the opportunity to continue to manage the Company for the remainder of 2021 and beyond.

Yours sincerely

For and on behalf of Brevan Howard Capital Management Limited in its capacity as general partner of Brevan Howard Capital Management LP

1 Company’s performance and statistics calculated using monthly NAV per share data of the Sterling share class. Launch date: 22 May 2008. “MSCI World Index” and “FTSE 100” performance and statistics calculated using monthly returns of MSCI World Net Total Return USD Index and FTSE 100 Total Return Index GBP, Source Bloomberg. Annualised rate of return, volatility and information ratio calculations are based on monthly returns.

Company website:


Sir Michael Bunbury

David Yovichic
Investec Bank Limited
020 7597 5970