BH Macro (BHMG)

14/05/2025

Results analysis from Kepler Trust Intelligence

BH Macro invests in the Brevan Howard Master Fund Limited (the Master Fund) whose investment objective is to generate consistent long-term appreciation through active leveraged trading and investment on a global basis. During 2024, BH Macro's GBP NAV per share rose by 5.86%, and by 4.92% for the US Dollar Class shares. The difference between the two being largely the contribution from GBP share class buybacks.

The share price performance was higher for both share classes at 10.63% for the Sterling Class shares and 10.61% for the US Dollar Class shares, with the discount to NAV narrowing.  The board continued with a substantial buyback programme throughout the year, spending some £116m.  The Board is very conscious that a modest discount above 5% remains unsatisfactory over a long-term horizon, and that the additional volatility created by moving from premia to discounts for the share price undermines one of the key virtues of being invested in the Master Fund.

Ongoing charges increased over the year from 2.16% in 2023 to 2.95% in 2024, a result of 0.74% of performance fees being paid in 2024.

Those shareholders of each of the Company's two share classes who voted in the Class Closure Resolutions vote did so decisively against class closure, with 98.22% of those who voted voting against for GBP shares and 99.86% for USD shares (percentage calculations are based on voter turnout not total share class size).   

Kepler View

It is encouraging to see BH Macro's discount to NAV narrowing during the period, from 10.7% at 01/01/2024 to 6.7% at 31/12/2024 for the GBP share class, as a result of the Board's continued buyback programme and steady performance. The latter half of the year saw a notable uptick in performance, with GBP monthly NAV returns of 5.1% and 7.0% in September and November 2024 respectively, largely driven by rates and FX trading.  Overall, FX trading has been a strong contributor to BH Macro's returns over the year. Digital Assets and share buybacks have also contributed, showing the benefits of diversification but also of the board's activities.

So far this year, BH Macro has had a slightly harder time of it, with the GBP NAV -2.45% as at 09/05/2025. The GBP shares' discount is 7.1% (as at 13/05/2025). This compares to the average for the five years (to 13/05/2025) of a premium to NAV of 0.4%. Strong performance in absolute or relative terms from the Master Fund would provide catalyst for the discount to narrow. Since the period end, a resounding majority of voting shareholders in each of the Company's two share classes voted against class closure resolutions. This demonstrates ongoing investor conviction in BH Macro's continued unique proposition of offering access to a diversifying macro hedge fund strategy. 

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