BH Macro (BHMG)

18/09/2023

Results analysis from Kepler Trust Intelligence

Having had a banner year in 2022, 2023 has so far proven rather more challenging for BH Macro (BHMG). However, whilst short term NAV performance from the Brevan Howard Master Fund (into which BHMG invests) has been disappointing, the largest impact for shareholders this year has been felt in the considerable de-rating in the share price relative to NAV. As the interim results published recently highlight, over the six months to 30/06/2023, BHMG's Sterling shares moved from a premium of 7.39% to a discount of 6.36% over the six months.

BH Macro's chairman's statement explains that two events during the interim period contributed to the discount widening, one of which was down to performance in March 2023, and the other being the announcement of a proposed merger between two of BH Macro's largest shareholders.

The chairman notes "March delivered a very sharp reversal of fortunes", and "it will be scant consolation to shareholders that the reversal in the company's performance represented "only" 4.29% of the NAV of Sterling shares in March". The chairman also notes that following the SVB crisis "directional positions were essentially eliminated within two business days. This rapid action by the manager in the face of loss-making positions is a hallmark of Brevan Howard's risk management process and has served investors well over the past two decades".

The other event, outside the control of BH Macro's board or manager that has contributed to the discount widening, is the mooted merger between Investec Wealth and Rathbones. BH Macro's board have stated that "whilst this remains a possibility, the board and its advisors have been in regular discussion and continue to monitor the situation closely".

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