August 12, 2015 / 3:15 PM / 2 years ago

Exclusive: Star trader Rokos courts investors for blockbuster hedge fund launch

LONDON/BOSTON (Reuters) - A former top Brevan Howard trader is courting investors for a hedge fund launch which promises to be among the biggest in the sector this year and which sources say is already on course to attract its initial target of some $3 billion.

Chris Rokos, 44, who made $4 billion for Brevan's fund between 2004 and 2012 thanks to a track record of winning bets on economic trends, set up Rokos Capital Management in March after ending a legal dispute with his former employer.

The firm is expected to launch in October or November, subject to regulatory approvals, the sources with direct knowledge of the matter said.

The launch will be backed by well over $500 million from Rokos and his partners, the sources said, making the fund a large player in a field of sub-$100 million funds and potentially attractive to large institutional investors.

Pension funds and other long-term investors make up the bulk of new hedge fund inflows and many are looking to raise exposure to funds betting on macroeconomic trends, as divergent economic policies create investment opportunities.

"This is definitely going to be a unique launch because he's got a good track record and excellent pedigree and people want to allocate more money to global macro," said one investor, who is not permitted to discuss the expected launch publicly.

A spokesman for the firm declined comment.

The launch comes as macro hedge funds bounce back after years of lackluster returns. Investors allocated $4.3 billion in the first half of the year to the strategy after pulling out $14 billion last year, data from industry tracking group Eurekahedge showed.

BEST RETURN

Macro hedge funds, which bet on assets such as stocks, currencies, bonds, commodities and indexes, gained 3.2 percent through July this year, their best seven-month return since 2012, Eurekahedge data showed.

Most of the money invested in Rokos Capital Management will be allocated by Rokos himself, with a primary focus on foreign exchange, fixed income and equity index products in developed markets and relatively liquid emerging markets, sources said.

Helping him will be two portfolio managers: Stuart Riley, ex-Goldman Sachs (GS.N) co-head of Asia Pacific macro trading, and former Brevan Howard colleague Borislav Vladimirov, hired in April from Graticule Asset Management Asia.

Each of them will also run money, both by themselves and in collaboration with Rokos, and will be supported by two assistant portfolio managers, Nick Dawson and Jian Chao Wu. The broader firm's headcount is just over 50, the sources said.

The improving backdrop for macro investing means Rokos is not the only star trader looking to tap investors for cash. Soros Fund Management chief investment officer Scott Bessent plans to launch with at least $2 billion in 2016.

"Both men are macro traders coming from large, established organizations with good track records and Bessent is sure to have a lot of people look at him," said one source. "But Rokos will have the advantage of having a predefined constituency from Brevan Howard."

Editing by Alex Smith and David Holmes

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