22nd Jan 2021 14:03
(Alliance News) - BH Macro Ltd and BH Global Ltd on Friday both said they had received a letter from their managers requesting that previously agreed fee concessions be withdrawn or else the management agreement may be terminated.
BH Macro is a a feeder fund that invests all of its assets directly into the Brevan Howard Master Fund.
Manager Brevan Howard Capital Management LP has said that management fee concessions, agreed in 2016 and 2017, no longer support BH Macro's future success and proposes these be withdrawn with "contractual fee terms are adjusted back broadly to their prior position".
Specific changes proposed include that the fixed component of the fee paid to the Brevan Howard Capital Management be raised to 2% per annum, down from 2.5% before 2017 and that the notice period be extended to 12 months, though still lower than the 24 months that applied until 2017.
Other changes are that share buybacks or redemptions above a 5% allowance attract a 2% fee payable to the manager and that a mandatory liquidation shareholder vote be automatically triggered should BH Macro's net asset value drop below USD300 million at the end of any calendar quarter.
In BH Global's case, which invests in the Brevan Howard Multi-Strategy Master Fund, manager Brevan Howard Capital Management Ltd proposes that concessions are withdrawn and the fixed component of the fee paid to the manager be adjusted back to their prior 2% per annum level, which was paid from 2014.
For both companies, should a circular not be published before February 17 to convene an extraordinary general meeting to approve these proposals then their managers plan to serve notice of termination of the management agreement and their investment in master funds will be redeemed.
GBP shares in BH Macro were down 1.4% at 3,620.00 pence in London on Friday afternoon while USD shares were up 1.1% at USD37.40. BH Global shares were down 1.5% at 1,990.00p.
By Anna Farley; [email protected]
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