Morning Coffee: Inside the cut-throat world of hedge fund trading
Chris Rokos very rarely made a loss during his time at Brevan Howard. In fact, he made a combined $4bn for the hedge fund in the eight years prior to 2012, with one minor ‘blip’ (going $12m in the red in 2010), before surging back with a $1.27bn profit for the Brevan Howard Master Fund in 2011.
However, coincidentally or not, before deciding to move on in June 2012, Rokos made the worst loss during his time at Brevan Howard, or around $383m. Brevan Howard, like most hedge funds, is intolerant of underperformance, but here it seems unlikely that Rokos was shunted towards the exit as he was consistently marketed as the firm's "star trader". The only reason these figures are even coming to light is because Rokos is fighting an agreement he made with Brevan Howard to stop him managing external money until 2018 and they have been filed in court documents.
What they provide is a hitherto unseen insight into the profits and remuneration at the notoriously secretive hedge fund. Rokos personally made $900m while working at Brevan Howard since co-founding the firm in 2002, and is currently being paid $72.97m in yearly payments due to him as a retired partner of the firm.
Suffice to say, Rokos is unhappy with the arrangement suggesting that it is “unreasonable” and will prevent him from working for “one quarter of his remaining career”. More pressingly, perhaps, Rokos’s professional reputation would be “irreparably damaged”, he claims in the court documents.
Brevan said that Rokos’ position gave him “direct access to an ongoing contact with the limited pool of investors and potential investors prepared to make substantial investments through a hedge fund.”
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