DUBAI/LONDON (Reuters) -Abu Dhabi alternative investment manager Lunate is acquiring a minority stake in hedge fund Brevan Howard, the two companies said on Tuesday, the latest high-profile investment by Abu Dhabi in a global asset manager.
The two firms said in a statement they would set up an investment platform based in Abu Dhabi, offering new funds, with an initial commitment of $2 billion by Lunate, with more capital to be raised from local and international investors “over time”.
They did not provide further details on the size or value of the stake in Brevan Howard.
Lunate, which manages $110 billion of assets, is part of a business empire steered by Sheikh Tahnoun bin Zayed Al Nahyan, the United Arab Emirates’ (UAE) national security adviser and brother of UAE President Sheikh Mohammed bin Zayed Al Nahyan.
The deal marks Lunate’s strategic expansion into hedge funds and it is the latest investment in asset management by Abu Dhabi, which has become a magnet for the industry in recent years on the back of an influx of millionaires and the presence of some of the world’s biggest sovereign wealth funds.
Brevan Howard, founded in 2002 by Alan Howard, and a group of Credit Suisse traders, manages about $34 billion betting on disparities in global economies. Headed by CEO Aron Landy, its clients include sovereign wealth funds, corporate and public pension plans.
Its annualised rate of return since 2003 is 8.1%, according to a source close to the matter.
The hedge fund does a significant amount of its crypto trading from the UAE because of the country’s “sensible regulations,” an executive said at a conference in October.
ABU DHABI EXPANSION
Abu Dhabi, which holds 90% of UAE’s oil reserves, has accelerated efforts to diversify its economy, leaning on its vast sovereign funds that together manage almost $2 trillion of capital.
Wealth fund Mubadala, through its investment arm, led a consortium that acquired a 68% stake in Fortress last year. It also acquired a significant stake in U.S. private equity firm Silver Lake in 2020.
The emirate has seen a rush of firms setting up in its financial centre ADGM in recent years, including the family office of Bridgewater Associates founder Ray Dalio, who opened a branch in the emirate in 2023, deepening ties with Sheikh Tahnoon’s $1.5 trillion financial network.
Brevan Howard also set up a regional headquarters office in ADGM in 2023 and turned it into its largest office by assets managed globally, according to the statement.
The hedge fund has seen its performance recover from earlier in the year.
Brevan’s Master Fund ended the first quarter down almost 6% but clawed back performance to the end of June to a negative 0.7%, said a source.
(Reporting by Federico Maccioni and Hadeel Al sayegh in Dubai, Nell Mackenzie in London, editing by Susan Fenton and Sharon Singleton)
