Star hedge fund manager Chris Rokos still burning bright

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Few hedge fund managers can raise $ 1 billion immediately after losing a quarter of their investors. But Chris Locos is one of the traders whose Star Appeal is more than just compensating for short-term performance degradation.

Media-shy billionaire was Brevan Howard’s former top fund manager before launching Locos Capital Management, which has $ 13 billion in assets in 2015, and bond market volatility in 2021. Has endured one of the worst achievements of.

As the best profile casualties He suffered a bruise in October due to a malicious sale of short-term bonds in the fall, recording the company’s largest annual loss, losing 26%, or about $ 4 billion.

Still, his London-based company Earn $ 1 billion immediately We are trying to add more from recent external investors. Its funding was helped by Rokos, who is proud of one of the industry’s best long-term achievements, including the great early profits of the pandemic.In particular, it comes with many rivals Difficult to attract cash..

“”[Rokos] We earned a lot of brownie points by providing great returns in the turbulent environment of 2020, “said Amin Rajan, CEO of consultancy Create Research. “Despite the subsequent reversal, investors are willing to give him a suspicious benefit.”

Locos, who refused to speak to the Financial Times, is well-characterized and attractive, according to those who know him, his direct attitude and the math to solve problems that he may come across like a nerd. Known for his approach.

Born in London, he attended public school until he was 11 years old, after which he received a scholarship to Eton College and his first scholarship at Pembroke College in Oxford. After working with Goldman Sachs and Credit Suisse First Boston, and working with trader Alan Howard, he co-founded Brevan Howard, one of the biggest names in macro trading, in Brevan. It became “R”.

A specialist in trading government bonds and options, and betting on so-called yield curves (interest rates offered by various maturity debt), he makes billions of dollars in profits for investors while in the company. I did.

In 2007 he generated $ 1.1 billion, or 27% of the total profit of Brevan’s flagship master fund, and in 2011, he generated $ 1.3 billion, or 30% of the profit, according to court filings. According to someone familiar with his ideas, the perfect year of performance. ” While at the company, he personally earned about $ 900 million.

Locos is one of the most skilled managers in the world running a very large position in debt and options, said one industry insider who knows him. “When he understands it correctly, he understands it really, really correctly,” he added.

In Brevan, he was one of the most prominent voices at the company’s morning investment conference. He advocated a rigorous approach to money management, arguing that poorly performing traders should be dismissed immediately and that the first year of trader employment should be considered a job interview.

But in 2012 he left Brevan followed a dispute with co-founder Howard over his payment for the previous year’s performance, according to people familiar with the matter. Tensions with the company escalated when Locos was prevented from launching his own fund management company by a five-year non-compete obligation.

This was a nasty legal standoff as Locos challenged the provisions in a jersey court in 2014. Insisted Stopping him from running a hedge fund means “people … deprived. [his] Skills and hard work “.

Despite the battle, Locos and Howard maintained a friendly relationship, people familiar with them said.Proceedings that attracted attention were avoided when there was controversy solved At the beginning of the following year, it became possible to launch Locos Capital. According to someone familiar with his ideas, Howard didn’t want Locos to leave without any reward, while Breban invested a portion of his own money in a new fund. Will invest in.

Driven by inflows from large investors, including Blackstone, it has grown to be one of the largest macro funds in the world. With 44% revenue in 2020, he and his partner Profit Over £ 900m

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According to Sanda Im’s Rich List, his estimated personal property is £ 1.25 billion. He talked about plans to install a 16-foot-deep pool and high-diving board under Notting Hill’s house in 2007, and recently reportedly sued Deloitte and the United States. Was sometimes pushed into public. Law firm McDermott, Will & Emery talks about the tax advice he received.

Locos, a British supporter who remained in the EU and was formerly a major Conservative donor, was a few years ago. expedition A spokesman at the time said that investing in the British political magazine “Standpoint” before deciding on the “right-wing direction” of the publication was at odds with his “more middle-of-the-road view.” Stated.

In sectors that have struggled to raise new cash for years due to often sluggish performance, Rokos’ funding capabilities are still led by a small number of starters, even with poor short-term performance. It highlights the traction that you have.

However, some warn that investors have limited patience. “What if … He has another bad year and all bets are off,” said Rajan of Create Research.

laurence.fletcher@ft.com

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