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Brevan makes $200 mln commitment to Catalio Public

Equities fund

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Move highlights trend of hedge funds making external

investments

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Catalio fund posted 49% return net of fees since began in

2023

By Nell Mackenzie

LONDON, Nov 7 (Reuters) - Brevan Howard has made a $200

million commitment to Catalio Capital Management's healthcare

stock fund, two sources close to the matter said, in the latest

example of one of the world's biggest hedge funds investing in

other funds.

A Goldman Sachs report last month said that while just over

half of multi-managers invested in other hedge funds in 2022,

this had jumped to almost 75% as of October, in one of the most

significant trends in the sector in recent years.

Deal details are often as closely guarded as the industry's

performance metrics and only available to hedge fund investors.

The Catalio Public Equities fund in which Brevan Howard is

investing is part of Catalio Capital Management, a $2.3 billion

New York-based healthcare investment firm that invests in stocks

and bonds across private and public markets, one source said.

Macro hedge fund Brevan Howard is a private investment firm,

which bets on the value of assets rising as well as falling.

Catalio Capital Management, in which private equity firm KKR

invests, says on its website that it is focused on healthcare

and was co-founded by George Petrocheilos and Jacob Vogelstein.

Ben Snedeker, a former D.E. Shaw portfolio manager with

degrees in chemistry from Pennsylvania State University and

Yale, runs the Catalio Public Equities fund, it adds.

Under the deal, Brevan Howard will be responsible for the

risk, but the Catalio Public Equities fund will do the trading,

the two sources said, adding that investment terms will be

agreed through what is known as a separately managed account.

Catalio says its healthcare-focused stocks fund takes long

and short trading positions on global stocks including drugs,

devices, diagnostics and data companies.

It posted 12% returns net of fees from the start of this year to

October 31, said one of the sources, who could not be identified

as hedge fund returns are private. Since inception in 2023, it

has returned 49% net of fees, the source added.

Brevan Howard, founded in 2002 by Alan Howard and a group of

former Credit Suisse traders, manages about $34 billion. Led by

CEO Aron Landy, its clients include sovereign wealth funds as

well as corporate and public pension plans.

Brevan Howard recently added new trading firepower from Abu

Dhabi alternative investment manager Lunate, which in August

took an initial $2 billion minority stake, with more capital to

be raised from local and international investors "over time".

Reuters could not establish how any gains or losses it might

make from Catalio would be distributed among investors.