BH Global Limited
(the "Company")
(a closed-ended collective investment scheme established as a
company with limited liability under the laws of Guernsey with
registered number 48555)
LEI:
549300BIIO4DTKEMXV14
Investment
Management Agreement
22 January 2021
THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION
The Board of Directors of BH Global Limited notes the receipt
this morning of a letter from the General Partner of its manager,
Brevan Howard Capital Management Limited, the text of which is set
out in full below. The Board will consider the matters raised
therein, and make any further announcement as appropriate in due
course.
Letter from Brevan Howard Capital
Management LP to BH Global Limited
The Board of Directors (the “Board”)
BH Global Limited (the “Company”)
PO Box 255
Trafalgar Court
Les Banques
St Peter Port
Guernsey GY1 3QL
Channel Islands
22 January 2021
Dear Directors
Further to discussions between us which started in the first
half of last year, we write to set out clearly our position as the
manager (the “Manager”) of the Company.
Since its launch in 2008, the Company has had a strong track
record, performing similarly to equity markets with significantly
lower volatility and with a history of delivering higher
performance when equity markets have declined. Since launch until
the end of 2020, the largest share class of the Company has had an
annualised rate of return of 5.5%, an information ratio of 0.92 and
a total return of 96.2%, with an annualised volatility of 5.9%.
Over the same period1:
- MSCI World Index had an annualised rate of return of 6.7%, an
information ratio of 0.4 and a total return of 126.1%, with an
annualised volatility of 16.8%.
- The FTSE 100 had an annualised rate of return of 4.2%, an
information ratio of 0.29 and a total return of 68.6%, with an
annualised volatility of 14.3%.
The Company has exhibited low correlation to other asset
classes, creating true diversification for portfolios, a quality
that was amply demonstrated during the market turbulence of 2020.
The Company offers investors unique access, via Brevan Howard
Multi-Strategy Master Fund Limited (the “Master Fund”) to a range
of the world’s leading hedge funds and portfolio managers, an
opportunity which has demonstrated its quality over more than a
decade.
As the Board will be aware from recent discussions and meetings,
we have invested heavily across a number of areas in building
Brevan Howard in recent years as we
look to invest for the future and seek to maintain and develop an
industry-leading business. While we continue to invest
significantly in attracting and developing the best possible talent
and also strengthening our technology, systems and infrastructure
that support them, it is essential that we are supported by all of
our investors, via their respective fee structures, to maintain the
quality of our platform. Noting the exceptional performance of the
Master Fund, the substantial ongoing investment and the
increasingly competitive environment, we have concluded that the
management fee concessions agreed in 2016 and 2017 no longer
support the future success of the Company. We therefore propose
that these concessions be withdrawn and the fixed component of the
fee paid to the Manager is adjusted back to its prior level of 2%
per annum, the fee level that was paid by the Company from
2014.
These terms (the “Proposed New Terms”) represent the minimum
level for us to continue to manage the Company as we build for the
future in competition with our industry peers. We believe that the
reversion of the fixed fee to the level that applied previously
will give us the needed flexibility to manage and grow the
Company.
We request that the Board convene an extraordinary general
meeting (“EGM”) of shareholders as soon as practicable to consider
approving the Proposed New Terms by way of a notice of EGM with a
circular setting out details of the proposal (the “Notice and
Circular”). We would welcome the opportunity to work with the Board
and its advisors to assist in the production of the Notice and
Circular.
In the event that the Notice and Circular are not published on
or before 17 February 2021, except in
the case of delay attributable to any necessary regulatory steps
being completed, the Manager intends to serve notice of termination
of the Management Agreement with the Company and the Company’s
investment in the Master Fund will be redeemed.
The implementation of the Proposed New Terms will allow us to
strengthen and grow the Company. We sincerely hope that
shareholders provide support to the Proposed New Terms and permit
us the opportunity to continue to manage the Company for the
remainder of 2021 and beyond.
Yours sincerely
For and on behalf of Brevan Howard
Capital Management Limited in its capacity as general partner of
Brevan Howard Capital Management LP
1 Company’s performance and statistics calculated using monthly
NAV per share data of the Sterling share class. Launch date:
22 May 2008. “MSCI World Index” and
“FTSE 100” performance and statistics calculated using monthly
returns of MSCI World Net Total Return USD Index and FTSE 100 Total
Return Index GBP, Source Bloomberg. Annualised rate of return,
volatility and information ratio calculations are based on monthly
returns.
Company website: www.bhglobal.com
Enquiries:
Sir Michael Bunbury
Chairman
David Yovichic
Investec Bank Limited
020 7597 5970