Brevan Howard expands external equity allocations

Brevan Howard is preparing to allocate capital to external equities-focused hedge fund managers and has hired Michael Dwier and Adolfo Oliete to lead allocations in the US and Europe/Asia, according to people familiar with the plans. The programme will operate through separately managed accounts and is expected to expand an existing external sleeve within the firm’s Alpha Strategies multi-strategy vehicle.

Michael Dwier, a former UBS executive, will concentrate on identifying and funding US-based long-short equity managers. Adolfo Oliete will focus on long-short equity funds across Europe and Asia. The outside allocations will be run alongside Brevan Howard’s internal equities teams and remain distinct from the firm’s internal trading profit and loss.

The programme uses separately managed accounts to place capital with outside managers while keeping those positions separate from the firm’s internal books. People briefed on the plans say the effort will scale up an element already present inside Alpha Strategies rather than create a wholly new fund structure.

Equities trading has been a notable contributor to Brevan Howard’s recent results, helping to offset weaker performance in rates and foreign-exchange strategies. The firm has been expanding its internal equities capability, including sector specialist hires under strategist Abhijit Chakrabortti and active stock exposure through traders such as Fash Golchin.

Industry estimates indicate more than 70% of multi-manager platforms now include external allocations, up from just over half in 2022. Brevan Howard has historically allocated external capital mainly to macro strategies, including investments in firms such as Key Square Group and ARP Global Capital. The firm manages more than $34 billion in assets and declined to comment on the equities programme.

Other large multi-strategy platforms have likewise increased external allocations. Millennium Management and Qube Research & Technologies have expanded their use of outside managers, and Citadel has provided selective backing to independent teams such as Toms Capital Investment Management, reflecting a broader trend of large funds deploying capital to outside specialists.