Trader Rokos restructures firm in bid to improve performance
Former Brevan star to assume oversight of all trading after lacklustre returns
Chris Rokos, the former star trader who made headlines when he broke away from Brevan Howard seven years ago, is shaking up the way his firm manages its $9.2bn in assets as performance lags some of its nearest rivals.
Mr Rokos, one of the biggest names in so-called “macro” trading, had been running 70 per cent of the money at Rokos Capital Management, with the remainder allocated between nine specialist portfolio managers. Those managers individually placed bets in areas such as interest rates, foreign exchange, equities, credit and commodities.
Following the shake-up, Mr Rokos will assume oversight of all trading and will allocate money to different trade ideas, the firm said. The new structure should allow the firm to make bigger bets on attractive positions, without being restricted by the size of an individual manager’s trading book.
Investors in Rokos Capital Management — launched in 2015, after Mr Rokos settled a lawsuit with his former colleagues — had questioned why the managers were overseeing nearly a third of the firm’s assets when they were paying for exposure to the founder. He had generated billions of dollars at profits at Brevan Howard, and was the “R” in the Brevan acronym.
Mr Rokos has been frustrated with the fund’s performance, said a person familiar with his thinking. The fund is up 6.7 per cent through the end of September, compared to rivals including Brevan Howard, which is up 7.5 per cent, and Kirkoswald Capital, which has made double-digit gains.
Rokos Capital was up 20 per cent in 2016, but has posted lacklustre returns over the past two years.
“He’s very much middle of the pack and he doesn’t want to be — he wants to be exceptional,” said the person familiar with Mr Rokos’s thinking.
The move will “maximise the efficient deployment of capital and best capture the value to the overall fund of its product specialists,” a spokesman for the fund said. “This adjustment forms part of RCM’s ongoing efforts to manage fund capital as efficiently as possible in order to maximise returns for investors.”
Now all of the managers will be part of a core team under Mr Rokos.
“Trading strategies will be consistent with the economic views of the fund as determined by Mr Rokos, informed by RCM economic research and market analysis,” the spokesman added.