Hedge fund star manager Chris Rokos is still on fire


There are few hedge fund managers who could raise a billion dollars soon after investors lost a quarter of their money. But Chris Rokos is one of the retailers whose allure stars continue to more than make up for short-term performance losses.

The media-shy billionaire, a former general fund manager at Brevan Howard before starting Rokos Capital Management with $ 13 billion in 2015, endured one of his worst periods of performance during the tough 2021 for bond markets.

As the highest profile victim from a vicious short-term bond sale in the fall, he suffered bruises in October and recorded his company’s biggest annual loss, losing 26 percent – or about $ 4 billion.

Still, his London-based firm did quickly take in a billion dollars from outside investors in recent days and wants to add more. That fundraiser helped Rokos, who had one of the best long-term records in the industry, including big gains at the start of the pandemic. Noticeably, so many rivals are coming struggle to attract cash.

“[Rokos] has earned a lot of cookies by achieving stellar results in the hot environment of 2020, ”said Amin Ryan, CEO of Create Research. “Investors are willing to give him the advantage of suspicion, despite the subsequent reversal.”

Personal and appealing to those who know him, Rokos, who declined to speak to the Financial Times, is known for his direct manner and mathematical approach to solving problems that may seem silly to some.

Born in London, he went to public school until he was 11, before receiving a scholarship to Eton College, and then took his first at Pembroke College in Oxford, of which he is a major donor and where the quad now bears his name. After working at Goldman Sachs and Credit Suisse First Boston, where he worked with retailer Alan Howard, he co-founded Brevan Howard – one of the biggest names in macro trading – becoming an “R” in Brevan.

The specialist in trading government bonds and options and betting on the so-called yield curve – interest rates offered by different maturities of debt – earned billions of dollars in profits for investors during his time at the firm.

In 2007, he made $ 1.1 billion, or 27 percent of the total profit of Brevan’s leading Master Fund, according to court submissions, and in 2011 he earned nearly $ 1.3 billion, or 30 percent of his profit – a result he considered a “perfect year.” ”Performance, according to a person familiar with his thinking. During his stay at the company, he personally earned about 900 million dollars.

Rokos is one of the world’s most skilled managers in leading very large positions in debts and options, said an insider from the industry who knows him. “When he figured it out properly, he figured it out really, really right,” the person added.

In Brevan, he was one of the most prominent voices at the company’s morning investment meetings. He advocated a strict approach to fund management, arguing that traders with poor results should be fired quickly and that the first year of a trader’s employment should be seen as a job interview, said a person familiar with his thinking.

But 2012. he left Brevan after a dispute with co-founder Howard over his payment for last year’s performance, according to a person familiar with it. Tensions with the firm escalated when Rokos was prevented from starting its own fund management firm by a five-year non-compete clause.

This turned into a messy legal conflict as Rokos challenged a clause in a Jersey court in 2014. In court submissions, his lawyers argued to prevent him from running a hedge fund would mean “publicity. . . they will be deprived [his] skills and hard work ”.

Despite the battle, Rokos and Howard remained friends, people familiar with the matter said. A high-profile litigation was avoided when the dispute arose resolved early next year, which allowed Rokos Capital to launch. Howard, who did not want Rokos to leave without getting anything in return, according to a person familiar with his thinking, would invest part of his money in a new fund, while Brevan would take a stake in Rokos’ firm.

Driven by the influx of large investors, including Blackstone, it has grown into one of the world’s largest macro funds. A 44 percent return in 2020 helped him and his partners profit more than £ 900 million.

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His personal fortune is estimated at 1.25 billion pounds, according to the list of the rich Sunday Times. This has pushed him to the public from time to time, as in 2007, when plans to set up a 16-foot-deep pool and high diving board under his Notting Hill home generated headlines, and it was recently announced that Deloitte and U.S. law firm McDermott are suing. Will & Emery for the tax advice he received.

A supporter of Britain’s remaining in the EU and formerly a major donor to the Conservative Party, Rokos a few years ago researched investing in the British political magazine Standpoint, before deciding the “right direction of travel” of the publication was contrary to his “centrist views”, a spokesman said at the time.

In a sector that has struggled for years to raise new money due to often poor performance, Rokos ’ability to raise funds underscores the power of attraction that several star retailers still have, even when short-term results are poor.

But some warn that investors’ patience is limited. “If . . . has another bad year, all bets are off, ”said Ryan of Create Research.

laurence.fletcher@ft.com



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