BH Macro (BHMG), the £1.3bn Brevan Howard hedge fund, has confirmed that closure meetings will be held for its sterling and dollar share classes.
This is the second year that votes to close the share classes and possibly wind up the investment company have been triggered by the average share price discount exceeding 8% during a calendar year, prompting it to increase buybacks of the stock. This follows a derating of the defensively managed currency and bond portfolio after a big share issue in 2023.
BH Macro has published a circular detailing how shareholders can submit proxy votes by 17 February before the meetings are held on 19 February in Guernsey. Last year 98% of votes in the sterling investor meeting backed the continuation of the share class.
BH Macro says there are a range of options if shareholders do vote to close either of the two share classes this time:
- it can offer to buy their shares at asset value minus costs (although it would take 12 months for the underlying holdings in the Brevan Howard master fund to be redeemed and for shareholders to receive their money);
- convert them to another share class;
- let them remain in the share class.
If shareholders vote to close both shares classes then the 19-year-old feeder fund will be wound up.
The board of the company is recommending that shareholders vote against the special resolutions, which require 75% or more of votes to pass.
Chair Richard Horlick pointed out that BH Macro, the only London-listed hedge fund of its kind, had done its job of delivering steady, non-correlated investment returns. Since launch in 2007, the underlying annualised growth in net asset value had been 8.2% for the sterling shares and 8.3% for the dollar shares, both with below average volatility.
Brevan Howard said the “opportunity set” in its global markets remained “compelling” given the “backdrop of shifting political dynamics and elevated volatility and uncertainty”.
This week Brevan Howard said it was planning to launch a new private hedge fund which could buy shares in BHMG that may sold as a result of the votes.
