Brevan Howard's new breed helps macro fund overcome major drawdown

These trades were quickly rewarded with a 7.8% gain in net asset value (NAV) as the European Central Bank cut rates and pledged to do whatever it took to fix the eurozone, while America's Federal Reserve launched its third round of easing.

By the year-end, BH Macro finished 3.86% up.  Howard said he was pleased these returns had come from traders - including its 38 new recruits - rather than from one or two large books attracted to the fund.

'Haunting' risks

Looking forward, Howard said the tail risks that had 'haunted' investors for the last five years appeared to have faded, although he believes they have not totally disappeared.

'A naive faith in policymakers' ability to provide a perpetual put may yet prove to be a serious error, and with interest rates stuck at zero, investors' ability to easily earn back losses remains severely  impaired,' Howard cautioned.

With this in mind, he said Brevan Howard should maintain its risk management discipline and stay mindful of the potential for renewed stress, though feels more optimistic about the macro trading outlook than he has for some time.