Brevan Howard Asset Management is preparing to allocate capital to external equities-focused hedge fund managers, marking an expansion of its strategy of backing outside talent beyond its traditional macro trading base, according to a report by Bloomberg.
The firm has hired former UBS executives Michael Dwier and Adolfo Oliete to lead the initiative. Dwier will focus on allocating capital to US-based managers, while Oliete will identify long-short equity hedge funds across Europe and Asia, according to people familiar with the matter.
The new programme will operate through separately managed accounts and is expected to scale up an existing component of Brevan Howard’s multi-strategy Alpha Strategies fund, extending its use of external manager allocations.
Historically, Brevan Howard has primarily invested externally in macro strategies, including allocations to funds such as Key Square Group and ARP Global Capital. The shift into equities reflects a broader industry trend among large multi-strategy firms increasingly deploying capital to outside managers as internal platforms grow in size and complexity.
Institutional allocator activity has risen sharply in recent years, with industry estimates suggesting that more than 70% of multi-manager platforms now allocate capital externally, compared with just over half in 2022.
For Brevan Howard, the move comes amid a period in which equities trading has been a key contributor to performance, helping offset weaker results in rates and foreign exchange strategies. The firm has also been steadily increasing its internal equities capability, including building out sector specialist teams under strategist Abhijit Chakrabortti and maintaining active stock exposure through traders such as Fash Golchin.
The trend places Brevan Howard alongside other major hedge fund platforms such as Millennium Management and Qube Research & Technologies, which have increasingly used external capital allocation as a tool to scale exposure and access specialised trading talent.
Citadel has also participated selectively in this ecosystem, recently providing backing to external manager Toms Capital Investment Management, highlighting growing crossover between large multi-strategy firms and independent hedge funds.
Brevan Howard, which manages more than $34bn in assets, reportedly declined to comment.
