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Abu Dhabi-backed alternative investment manager Lunate acquired a minority stake in hedge fund Brevan Howard as the UAE firm deepens ties with investors building a track record in the country and pushes further into digital assets.
Lunate also committed $2 billion for a new investment platform run out of Abu Dhabi’s financial center ADGM, where Brevan Howard has its regional headquarters.
Lunate is largely courting Gulf pension funds, institutions, and family offices to tap outside capital, a person familiar with the matter told Semafor. Investments will be made into Brevan Howard’s existing strategies, including credit and emerging markets, with a smaller share going to investments in crypto and fintech.
Given the capital will be invested in Brevan Howard’s existing platforms, neither side has any immediate plans to add headcount as a result of the deal, the person added. A spokesperson for Lunate declined to comment.
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Co-managed funds are a small but growing segment of the $110 billion Lunate manages for clients, including Abu Dhabi sovereign wealth fund ADQ. Last year, Lunate partnered with New York’s Blue Owl Capital in a mid-sized private capital general partner fund, and in May it announced a $1 billion partnership with Brookfield on Gulf real estate deals.
Through such partnerships, Lunate has become one of the region’s fastest-growing gateways to alternative investors looking to deploy the Gulf’s vast wealth.
Its equity investment in Brevan Howard, while a rarity for hedge funds to give up general partner shares, is not unheard of, and cements a trend in which other Gulf investors have demanded stakes in businesses they partner with, alongside participating in an asset manager’s upside.
The 23-year-old firm established its regional headquarters in Abu Dhabi in 2023 — the same year Lunate was formed — and the UAE capital now hosts its biggest office by assets managed, surpassing New York and London.The Lunate deal comes with Brevan Howard’s co-founder Alan Howard having sought an outside investor as part of a long-term succession plan, the Financial Times reported.
The tie-up comes at a time of market volatility, with investors navigating high inflation, uncertainty over tariffs and supply chains, as well as geopolitical tensions. Brevan Howard invests in global markets based on broad economic changes, like the rate of inflation or interest rates.
Two of its flagship funds have posted mixed results: The Alpha Strategies fund, which aims to provide consistent returns every year, was up 6% to mid-August, while the Master fund was down 1%, according to the FT.
Notable
- Dubai is still the region’s financial center. But Abu Dhabi and Riyadh have it in their sights, Financial Times reported.
- Abu Dhabi has been doubling down on crypto of late, tapping its largest entities to create a national stablecoin and becoming one of the few institutional investors in Binance, through state-backed fund MGX, according to Reuters.