* Brevan one of most successful managers in 2011
* Multi-Strategy fund size doubles in six months
* Big-name managers attracting bulk of new cash
By Laurence Fletcher and Tommy Wilkes
LONDON, April 24 Investors desperate to get exposure to Brevan Howard's Master fund, one of the world's biggest and top-performing hedge funds, are piling into a fund giving them only partial exposure to the secretive firm's flagship portfolio.
The Brevan Howard Multi-Strategy Master Fund - which invests in the group's $27 billion flagship Master fund and other, smaller strategies - has grown to more than $2.3 billion from around $1.1 billion last September, data seen by Reuters shows.
This growth spotlights the popularity currently enjoyed by a small band of hedge funds such as Brevan, which are attracting the bulk of new cash but also having to juggle a commitment to existing investors to limit the size of their flagship portfolios while not turning away new clients.
For many investors the Multi-Strategy fund is the only way to gain access to Brevan's Master fund, which has made money every year since its launch in 2003, because it is now shut to new cash, one investor said.
However, the group has suggested investors put money into its Multi-Strategy fund, the investor and another client said. This gives clients partial exposure to the Master fund as well as a range of the group's other, much smaller portfolios.
"It's a way to give money to other funds they're building. They're saying to institutions that it's the only way to get exposure," said the investor, who did not want to be named.
Brevan Howard declined to comment on investor flows.
The Master fund was one of 2011's top performers, gaining upwards of 12 percent while on average hedge funds fell more than 5 percent, according to Hedge Fund Research.
One of the world's biggest hedge fund managers, Brevan was founded by secretive ex-Credit Suisse trader Alan Howard and is based in London and Geneva. It runs several smaller funds including commodities, emerging market and computer-driven portfolios.
Brevan's other strategies are still small when compared with the Master fund, so surging demand for the Multi-Strategy fund will boost their assets. The Asia fund runs around $1.8 billion, while the Emerging Markets Strategies Fund some $2.4 billion.
Brevan Howard declined to say what the Cayman-incorporated Multi-Strategy fund invests in.
However, it held around 6.5 percent, or $111 million, of the Brevan Howard Credit Catalysts Master Fund, which trades credit and mortgage-backed securities, on June 30 2011, according to that fund's interim financial statements last year.
Another of Brevan's internal fund of funds, the Global Opportunities fund, invests just under half its assets in the flagship Master fund and spreads the rest across five other strategies, according to the annual report for its listed feeder fund BH Global.
Last year it sold its positions in Brevan's Equity Strategies Feeder fund and the Strategic Opportunities Feeder fund and invested in the $900 million Systematic Trading fund, which was launched in March 2010
It also put money into the Commodities Strategies fund, while earlier this year 3 percent of Global Opportunities was allocated into the Emerging Markets Local Fixed Income fund.
A number of London's biggest hedge fund managers, including CQS and BlueCrest, have internal funds of funds, which offer investors exposure to a range of their portfolios.
Brevan has said in the past capacity constraints do not force it to limit the size of the Master fund, as the markets it operates in are large and liquid enough to absorb its big bets.
But last year, in an effort to make good on a promise to investors that it would not let the Master fund grow too large, Brevan returned $2 billion to clients after strong returns inflated the fund's size, sources said at the time.