Brevan Howard takes minority stake in structured credit manager 1543 Capital

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Deal agreed

Brevan Howard, the high-profile global macro hedge fund firm co-founded by Alan Howard, has taken a minority stake in 1543 Capital, an alternative credit and structured finance-focused investment manager, as part of a new strategic partnership.

The partnership will see Brevan Howard take a board seat in the credit manager, which has around USD450 million in assets. The hedge fund giant will also acquire capacity rights to invest in future funds managed by 1543, whose focus spans asset-based investing, commercial real estate debt and equity, consumer and student loans, and trade finance.

Alan Howard meanwhile has made a personal investment in 1543 Capital Fund I, the firm’s private equity-style fund vehicle which aims to generate risk-adjusted returns from market opportunities across investment cycles.

1543 Capital LP – which originally launched its drawdown private credit-oriented fund in August 2019 with USD75 million, now with USD125m of capital commitments – already advises Brevan Howard on USD200 million of structured finance assets, up from USD100 million at inception.

The firm focuses on structured credit, corporate loans and private credit opportunities over multiple market cycles, with target returns of between 10-15 per cent annually. Specific trading themes include rising credit demand and credit needs among private debt and real estate borrowers, a slew of new asset classes arising from venture capital-backed specialty finance firms, and the funding gap arising from regulatory changes which have curbed certain traditional bank lending avenues.

Prior to launching 1543 Capital in 2019, Andrew Ulmer, the firm’s founder and CIO, had been a credit-focused portfolio manager at Brevan Howard before launching DW Partners, a spin-out of Brevan’s credit unit, in 2009.

Along with Ulmer, 1543’s team comprises portfolio manager Geoff Williams, a former executive managing director at Goldman Sachs who co-ran its CMBS, CDO and commercial real estate loan trading business; portfolio manager Brian Zola, former co-head of structured finance and partner at DW Partners, and Richard Gannalo, CFO and former US CFO & COO at Cross Ocean Partners.

Brevan Howard CEO Aron Landy said 1543 Capital’s team has long-standing links to Brevan Howard and a “track record of success”.

“Partnering with them is a testament to our belief in their quality and skill as well as the firm’s potential, and we look forward to developing the relationship further in the years to come,” Landy said.

Andrew Ulmer, founder and CIO of 1543 Capital, said: “Brevan Howard is a firm with an exceptional pedigree, built over many to years and is rightly considered one of the pre-eminent asset managers in the world. This partnership will be a catalyst to the development of 1543 in the years ahead.”

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Hugh Leask
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