22 Nov 2010
The prospectus for Brevan Howard Credit Catalysts, a new closed ended credit fund due to list on the London Stock Exchange in December, reveals that it will offer dollar and sterling share classes. The offer is to close on Dec 8 with unconditional dealings set for Dec 14.
The initial public offering will price shares at $10 and £10 but won’t offer a euro share class. This marks a departure from Brevan Howard’s other closed ended funds, BH Macro and BH Global, which offer three share classes ($, £ and €) and manage $2.9 billion.
BH Credit Catalysts Limited is a Guernsey-incorporated investment company. Through a feeder fund, the listed vehicle will invest substantially all of its assets in Brevan Howard Credit Catalysts Master Fund Limited, an open-ended, Cayman-incorporated investment company.
Fees are a monthly management fee of one-twelfth of 2% and an annual 20% performance fee, subject to a high water mark. There is also a proposed annual partial capital return mechanism, which may be exercised at the sole discretion of the directors, of between 33% to 100% of annual NAV appreciation and a discount management mechanism with a 5% trigger.
The investment manager of BHCC is DW Investment Management, LP, is a specialist credit manager located in New York. DWIM, run by ex-Morgan Stanley trading chief David Warren, manages money exclusively for Brevan Howard under the supervision of its risk management team.
DWIM’s credit trading team has a strong track record producing total net return performance of 51% during May 2008 to October 2010, a period characterised by some of the most volatile markets in recent history.
The sole bookrunner to the Company’s initial public offering is Dexion Capital plc and the sponsor is PricewaterhouseCoopers LLP.
The initial public offering will price shares at $10 and £10 but won’t offer a euro share class. This marks a departure from Brevan Howard’s other closed ended funds, BH Macro and BH Global, which offer three share classes ($, £ and €) and manage $2.9 billion.
“We believe that the credit markets present significant investment opportunities,” said Nagi Kawkabani, CEO of Brevan Howard Asset Management. “During 2008 and 2009 the corporate and mortgage credit markets experienced price dislocations, resulting in securities being owned by investors who no longer wish to hold them.”
He added: “We believe that this environment, combined with there being a lack of capital to accommodate investors' liquidity needs, has created opportunities for managers to be able to tactically invest capital and trade the credit markets. Further, we believe that investment in the credit markets is highly suited to a catalyst-driven trading approach.”
BH Credit Catalysts Limited is a Guernsey-incorporated investment company. Through a feeder fund, the listed vehicle will invest substantially all of its assets in Brevan Howard Credit Catalysts Master Fund Limited, an open-ended, Cayman-incorporated investment company.
Fees are a monthly management fee of one-twelfth of 2% and an annual 20% performance fee, subject to a high water mark. There is also a proposed annual partial capital return mechanism, which may be exercised at the sole discretion of the directors, of between 33% to 100% of annual NAV appreciation and a discount management mechanism with a 5% trigger.
The investment manager of BHCC is DW Investment Management, LP, is a specialist credit manager located in New York. DWIM, run by ex-Morgan Stanley trading chief David Warren, manages money exclusively for Brevan Howard under the supervision of its risk management team.
DWIM’s credit trading team has a strong track record producing total net return performance of 51% during May 2008 to October 2010, a period characterised by some of the most volatile markets in recent history.
The sole bookrunner to the Company’s initial public offering is Dexion Capital plc and the sponsor is PricewaterhouseCoopers LLP.
