Hedge fund giant Brevan Howard hunts for new London home
LONDON (Reuters) - Brevan Howard, one of the world's top hedge fund firms which three years ago moved its main office to lower-tax Geneva, is back hunting for a new home in London amid signs some traders are missing the city's buzzing nightlife.
Brevan, headed by co-founder Alan Howard and which manages $37 billion in assets, is considering taking more than half the office space in a 65,000 square feet development at 7-8 St James's Square in the heart of London's plush hedge fund district, three property agents told Reuters.
The offices would replace Brevan's cheaper 38,000 square foot offices on Baker Street, where nearly half of Brevan's 400 staff worldwide are still currently located.
They could also provide a home for some of its Swiss-based executives - who include Alan Howard and founding partner Nagi Kawkabani - amid speculation among executives in London and Geneva that some Brevan traders may be disillusioned with life away from London's swanky restaurants and upmarket shops.
"I've heard that some of the traders who made the move out to Geneva have since come to regret that decision," said one prominent London-based hedge fund investor. "It seems that life in a small city doesn't always outweigh the tax savings."
Any such move would be a coup for Britain, which has been trying to position itself as a lower-tax base for entrepreneurs as it battles slow economic growth and a huge budget deficit.
Brevan Howard declined to comment.
"I heard a number of traders who came over want to head back. Everyone knows Alan Howard isn't happy here," said one Geneva-based hedge fund professional, who asked not to be named.
Just over 100 of Brevan's staff are based in the Swiss city.
Reuters revealed Brevan's plans to open a Geneva office in 2009. The firm said at the time it was for staff who wanted to move "for personal reasons" and that the move had nothing to do with an imminent rise in tax rates for top earners in Britain.
However, since Brevan's move conditions have become more difficult for Swiss-based hedge fund managers.
The Swiss franc has strengthened by around 20 percent against the dollar - in which most hedge fund firms earn their revenues - since the first half of 2010, increasing many of their staff and office costs.
Meanwhile, the top rate of income tax in Britain is to fall back to 45 percent from 50 percent, while the top marginal tax rate in Geneva is 44 percent.
And new Swiss regulation of fund managers is set to come in next year, effectively making Switzerland less attractive as a haven for those looking to escape tough EU rules.
Hiring staff in areas such as technology can be tricky in Geneva, while the Swiss city's more sedate lifestyle is not to everyone's taste.
"It's good for families - the trains are fast and the commute is shorter (than in London)," said one Swiss-based manager. "Single guys (who moved from London to Switzerland) do wakeboarding and skiing. But they miss the nightlife of London."
Rather than relocating staff to another country, as a multinational company may do, Brevan's policy is to allow staff to choose where they want to be based.
Brevan pays a reported 75 pounds per square foot at Baker Street, meaning its annual rent is likely to be around 28.5 million pounds. Rent would be more like 110-120 pounds per square foot at the St James's Square site, property agents said.
Brevan is looking for up to 40,000 square feet, two of the agents told Reuters. A typical 40,000 square foot office would hold 350-375 people.
The St James's Square development is due to complete late next year.
Brevan is best known for its $27 billion Master fund, which has never had a losing year and which made 21 percent in the market turmoil of 2008. Last year it rose 12.2 percent, while this year it is up 2.05 percent after strong gains in September.