According to Bloomberg, Brevan Howard Asset Management's cryptocurrency fund, BH Digital, has been a standout performer for the hedge fund firm, despite the firm's overall losses on macro trades this year. BH Digital, which manages approximately $1.7 billion in assets, reported a 34.5% return in the first quarter of this year. This has resulted in total gains of nearly 51% since the fund began trading in March 2022.
The impressive performance of BH Digital has been largely attributed to the significant increase in cryptocurrency values. For instance, Bitcoin's value has surged by about 50% from the end of March 2022 through the first quarter of this year. The fund's gains this year build on a strong performance in 2023, marking a successful expansion into the crypto space by Brevan Howard, a firm renowned for its macro trading expertise.
BH Digital was established in September 2021 and has since grown its business with additional capital and staff. The division now boasts over 40 team members. The fund's investment strategy includes liquid cryptocurrencies as well as relative-value and venture capital opportunities in the asset class.
However, the success of BH Digital contrasts with the underwhelming performance of other divisions within the firm in a challenging macro trading environment. Despite reducing losses on incorrect interest rate bets in March, the firm's flagship Master Fund, which manages around $12 billion, was still down by about 2% this year through April 5. Similarly, the Alpha Strategies fund, with approximately $12.5 billion in assets under management, lost around 1.3% over the same period. This is in stark contrast to a 6% gain in the Bloomberg Macro Hedge Fund Index so far this year.