Key Takeaways
- • Brevan Howard hired Duncan Larraz as a strategist in June 2017 to strengthen its quantitative analytics capabilities, recruiting him from Tages Capital where he served as head of quant analytics.
- • The Master fund declined 3.8% year-to-date through mid-2017, underscoring continued performance challenges at Alan Howard's flagship vehicle.
- • Headcount contraction accelerated in 2016, with the fund reducing staff by 32%—from 178 employees in 2015 to 122 by end of March 2016—reflecting ongoing fund outflows and performance pressures.
- • Senior trader departures have outpaced quant hiring, with James Watson (partner, ex-Morgan Stanley swaps head) joining Millennium Capital in May 2017, and other departures including Andrew Dausch to Moore Capital and Mark Deniston to RBS.
- • Despite headcount reductions, Brevan Howard remains willing to invest selectively in quantitative expertise and has raised graduate compensation from £90,000 to £150,000 to compete for junior talent across London, New York, and Abu Dhabi.
Summary
Brevan Howard is making selective hires in quantitative research even as the multistrategy hedge fund grapples with significant operational contraction. The fund brought on Duncan Larraz as a strategist in June 2017, tapping his experience as head of quant analytics at Tages Capital. Larraz brings a 15-year track record in systematic investing and financial engineering, including prior roles at UBS's asset management division in Chicago, where he led CDO investments, as well as stints at Morganweiss Capital (founded 2012), Charles Street Capital, and Essentia Analytics.
The hiring decision reflects a deliberate strategic choice to strengthen quantitative capabilities despite broader workforce reductions. Brevan Howard's Master fund has declined 3.8% year-to-date as of mid-2017, continuing a streak of underperformance that has pressured assets under management. The fund's headcount fell sharply in 2016, shrinking 32% to 122 employees by end of March 2016 from 178 at end of 2015, according to company filings. Fund outflows and performance headwinds have driven this contraction.
However, the firm is experiencing a notable divergence in talent flows: while investing in quant expertise, Brevan Howard has lost multiple senior traders. James Watson, a partner who joined in 2011 from Morgan Stanley where he headed swaps trading ex-euro, departed for Millennium Capital Management in May 2017. Similarly, Andrew Dausch, a former Goldman Sachs prop trader who also joined in 2011, left for Moore Capital Management. Mark Deniston exited to lead GDP rates trading at Royal Bank of Scotland in January 2017.
To retain junior talent amid competitive pressure, Brevan Howard raised graduate compensation from £90,000 to £150,000, signaling commitment to recruitment across its London, New York, and Abu Dhabi offices despite the fund's recent operational challenges. The strategy suggests management believes quantitative and technology capabilities are critical competitive advantages worth preserving even through a period of workforce rationalization.
The hiring decision reflects a deliberate strategic choice to strengthen quantitative capabilities despite broader workforce reductions. Brevan Howard's Master fund has declined 3.8% year-to-date as of mid-2017, continuing a streak of underperformance that has pressured assets under management. The fund's headcount fell sharply in 2016, shrinking 32% to 122 employees by end of March 2016 from 178 at end of 2015, according to company filings. Fund outflows and performance headwinds have driven this contraction.
However, the firm is experiencing a notable divergence in talent flows: while investing in quant expertise, Brevan Howard has lost multiple senior traders. James Watson, a partner who joined in 2011 from Morgan Stanley where he headed swaps trading ex-euro, departed for Millennium Capital Management in May 2017. Similarly, Andrew Dausch, a former Goldman Sachs prop trader who also joined in 2011, left for Moore Capital Management. Mark Deniston exited to lead GDP rates trading at Royal Bank of Scotland in January 2017.
To retain junior talent amid competitive pressure, Brevan Howard raised graduate compensation from £90,000 to £150,000, signaling commitment to recruitment across its London, New York, and Abu Dhabi offices despite the fund's recent operational challenges. The strategy suggests management believes quantitative and technology capabilities are critical competitive advantages worth preserving even through a period of workforce rationalization.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.