Moody's keeps top ratings on Brevan Howard funds

LONDON (Reuters) - Credit ratings agency Moody's has maintained its top ratings on four portfolios run by Europe's biggest hedge fund, firm Brevan Howard, which it initially awarded before the industry crisis last year.

The "OQ1" ratings, which denote an excellent grade in various areas of the fund's operations such as its trading and valuation process, were backed up by Brevan Howard's "excellent risk and liquidity management", Moody's said in a statement on Friday.

The agency also highlighted "the strength of the manager's overall approach towards governance of the fund".

"Despite their growth in assets under management, Brevan Howard has maintained the highest level of operational quality," said Odi Lahav, vice president at Moody's.

Brevan Howard ran $26.8 billion in assets at end-December, according to data provider EuroHedge.

The ratings come at a time of heightened investor concern across the industry about how hedge funds are managing their risks.

Investors have been particularly concerned by the effects of the $65 billion fraud perpetuated by jailed U.S. financier Bernard Madoff and by some hedge funds limiting investors' access to their cash when liquidity evaporated in some markets.

The Moody's ratings do not directly address the risk of the fund's investments.

The ratings cover The Master and Equity Strategies Master funds, which were initially given their ratings two years ago, and the Asia and the Emerging Markets Strategies Master funds, which were rated in April last year.

(To read the Reuters Hedge Fund Blog click on blogs.reuters.com/hedgehub; for the Global Investing Blog click here) (Reporting by Laurence Fletcher, editing by Will Waterman)