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(Alliance News) - BH Macro Ltd on Wednesday said its net asset value per share increased sharply in the first half of the year thanks to the strong performance of Brevan Howard Master Fund Ltd.
BH Macro's NAV per sterling share rose 22% to GBP31.68 as at June 30 from GP26.06 at the end of 2019. NAV per US dollar share increased 22% as well to USD32.92 from USD26.99.
The closed-ended investment company is a feeder fund that invests all of its assets directly into Brevan Howard Master Fund, a hedge fund focused on consistent long-term appreciation through active leveraged trading and investment on a global basis.
Chair Colin Maltby said: "In the first six months of 2020 the master fund has maintained the strong performance seen in 2018 and 2019, against a background in which market conditions have offered favourable opportunities for its macro-directional trading focus."
Maltby noted the correlation between the master fund's past performance and volatility, as "volatility or unstable expectations in foreign exchange and interest rate markets can provide fertile environments for the manager's trading strategies".
"Fluctuating expectations for US dollar interest rates, both short- and long-term, uncertainty in sterling markets over the consequences of Brexit, political and economic stresses in the Eurozone and in several important emerging economies have all contributed to this environment of greater opportunity for the master fund and the company," said Maltby.
BH Macro's net assets increased 18% in the six month period ended June 30 to USD660.5 million million from USD559.8 million at the end of 2019.
Maltby said: "The board continues to regularly review the potential risks to the company arising from the Covid-19 pandemic. That which could have the greatest potential impact would be a failure of the business continuity arrangements at a key service provider. To date these arrangements have proved resilient and robust, and we have no reason to believe that they will not remain so. The board is satisfied that, notwithstanding the global impact of the pandemic on business and society, it does not represent a major business risk for the company.
"The events of the past year support the hypothesis that the company's investment in the master fund provides a listed vehicle whose performance is uncorrelated with other asset classes."
It recommended no interim dividend.
Sterling shares in BH Macro were down 1.2% at 3,384.04 pence in London on Wednesday afternoon. Its US dollar shares were untraded, having last closed at USD35.30
By Anna Farley; annafarley@alliancenews.com
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