Key Takeaways
- • NAV growth outpaced share price decline in 2025: BH Macro's Sterling Class NAV rose 1.38% while share price fell 1.72%; USD Class NAV gained 0.83% but share price rose 1.68%, reflecting persistent valuation discounts averaging 8.10% (GBP) and 8.36% (USD) for the year.
- • Shareholder rejection of class closure votes signals confidence despite underperformance: In February 2026 votes, 96.23% of GBP share voters and 99.91% of USD share voters opposed closure, despite £116 million in buyback activity during 2025 failing to eliminate the discount premium.
- • Fee compression delivered material cost relief: Ongoing charges ratio declined from 2.95% to 2.47% on Sterling shares and from 3.06% to 2.40% on USD shares, driven primarily by reduced performance fees reflecting relative performance adjustments.
- • Board and manager acknowledge substandard 2025 performance: Both Brevan Howard Capital Management LP and the company's board characterized 2025 results as "less than satisfactory," though returns remained within expected bounds for the global macro strategy.
Summary
BH Macro Limited (BHMG) released its March 2026 results analysis, covering the financial year ended 2025, revealing a period of modest asset appreciation offset by market valuation headwinds and shareholder dissent regarding fund structure. The vehicle, which invests substantially all assets in the Brevan Howard Master Fund Limited, generated NAV returns of 1.38% for Sterling Class shares and 0.83% for USD Class shares during 2025. However, share price performance lagged NAV significantly, declining 1.72% for Sterling shares while USD shares posted a marginal 1.68% gain, reflecting the fund's persistent discount to net asset value.
The widening valuation gap prompted management action and shareholder intervention. Despite deploying £116 million in buyback activity during 2025—including US$1.3 million in USD share repurchases—average discounts persisted at 8.10% for Sterling shares and 8.36% for USD shares throughout the year. These structural pressures triggered shareholder votes in February 2026 on potential class closure. The outcome demonstrated decisive shareholder opposition to closure, with 96.23% of voting GBP shareholders and 99.91% of voting USD shareholders rejecting the proposal. This strong mandate against closure suggests investor confidence in the underlying strategy despite near-term performance concerns.
Cost structure improved materially, providing some offset to operational challenges. The ongoing charges ratio—encompassing management fees, performance fees, and Master Fund charges—declined from 2.95% to 2.47% on Sterling shares and from 3.06% to 2.40% on USD shares. Management attributed this improvement primarily to adjustments in the performance fee tier reflecting relative performance outcomes, delivering meaningful expense relief for investors across both share classes.
Candid acknowledgment of 2025's shortcomings came from both the board and Brevan Howard Capital Management LP, the fund's investment manager. Both parties characterized performance as "less than satisfactory," though they noted returns remained within expected bounds for a global macro strategy. This tempering of expectations reflects the broader investment environment challenges faced by active macro managers during 2025, positioning the fund's results within industry context while acknowledging execution gaps.
The widening valuation gap prompted management action and shareholder intervention. Despite deploying £116 million in buyback activity during 2025—including US$1.3 million in USD share repurchases—average discounts persisted at 8.10% for Sterling shares and 8.36% for USD shares throughout the year. These structural pressures triggered shareholder votes in February 2026 on potential class closure. The outcome demonstrated decisive shareholder opposition to closure, with 96.23% of voting GBP shareholders and 99.91% of voting USD shareholders rejecting the proposal. This strong mandate against closure suggests investor confidence in the underlying strategy despite near-term performance concerns.
Cost structure improved materially, providing some offset to operational challenges. The ongoing charges ratio—encompassing management fees, performance fees, and Master Fund charges—declined from 2.95% to 2.47% on Sterling shares and from 3.06% to 2.40% on USD shares. Management attributed this improvement primarily to adjustments in the performance fee tier reflecting relative performance outcomes, delivering meaningful expense relief for investors across both share classes.
Candid acknowledgment of 2025's shortcomings came from both the board and Brevan Howard Capital Management LP, the fund's investment manager. Both parties characterized performance as "less than satisfactory," though they noted returns remained within expected bounds for a global macro strategy. This tempering of expectations reflects the broader investment environment challenges faced by active macro managers during 2025, positioning the fund's results within industry context while acknowledging execution gaps.
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