Brevan Howard Asset Management is revamping its fee structure to incentivise longer capital commitments from investors in its flagship hedge fund, as the firm navigates its most challenging start to a year in over two decades, according to a report by Bloomberg.
The report cites unnamed sources familiar with the matter as revealing that the macro-focused hedge fund manager is reducing performance fees from 30% to 20% for select clients in the $11.4bn Brevan Howard Master. Additionally, the firm is lowering management fees for investors willing to commit capital for extended periods.
Under the new share class structure, investors opting for a five-year lock-up will pay a 1% management fee, while those choosing a three-year term will be charged 1.5%. The industry standard remains around 2% but can vary between firms.
A spokesperson for the Jersey-based firm, which oversees $34.3 billion in assets, declined to comment.
Hedge funds frequently employ longer lock-in periods to mitigate the risk of investor redemptions following periods of underperformance. This approach also provides a more stable fee base, enabling firms to retain top talent and invest in infrastructure.
The Brevan Howard Master Fund declined by 1.5% in March, bringing its year-to-date loss to 5.8%, according to Bloomberg reports. The fund had gained 5.1% in 2024. Meanwhile, the firm’s Alpha Strategies fund rose 1.5% in Q1 2025, and the Emerging Markets fund returned 4% over the same period.
Although it’s still early in the year, the Master Fund has only posted an annual loss exceeding 5% once since its inception in 2003, highlighting the severity of its current downturn.
Brevan Howard has seen assets rebound significantly from a low of approximately $6bn in 2019. However, the firm has lagged behind some of its peers in recent years, prompting strategic adjustments. Bloomberg previously reported that the firm has cut jobs, shuttered two funds, and recently scaled back the risk allowances for some of its traders as part of a broader effort to stabilise performance and restore investor confidence.
