Hedge fund giant Brevan Howard hunts for new London home


By Laurence Fletcher and Tom Bill

LONDON, Oct 12 (Reuters) - Brevan Howard, one of the world'stop hedge fund firms which three years ago moved its main officeto lower-tax Geneva, is back hunting for a new home in Londonamid signs some traders are missing the city's buzzingnightlife.

Brevan, headed by co-founder Alan Howard and which manages$37 billion in assets, is considering taking more than half theoffice space in a 65,000 square feet development at 7-8 StJames's Square in the heart of London's plush hedge funddistrict, three property agents told Reuters.

The offices would replace Brevan's cheaper 38,000 squarefoot offices on Baker Street, where nearly half of Brevan's 400staff worldwide are still currently located.

They could also provide a home for some of its Swiss-basedexecutives - who include Alan Howard and founding partner NagiKawkabani - amid speculation among executives in London andGeneva that some Brevan traders may be disillusioned with lifeaway from London's swanky restaurants and upmarket shops.

"I've heard that some of the traders who made the move outto Geneva have since come to regret that decision," said oneprominent London-based hedge fund investor. "It seems that lifein a small city doesn't always outweigh the tax savings."

Any such move would be a coup for Britain, which has beentrying to position itself as a lower-tax base for entrepreneursas 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 headback. Everyone knows Alan Howard isn't happy here," said oneGeneva-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 in2009. The firm said at the time it was for staff who wanted tomove "for personal reasons" and that the move had nothing to dowith an imminent rise in tax rates for top earners in Britain.

However, since Brevan's move conditions have become moredifficult for Swiss-based hedge fund managers.

The Swiss franc has strengthened by around 20 percentagainst the dollar - in which most hedge fund firms earn theirrevenues - since the first half of 2010, increasing many oftheir staff and office costs.

Meanwhile, the top rate of income tax in Britain is to fallback to 45 percent from 50 percent, while the top marginal taxrate in Geneva is 44 percent.

And new Swiss regulation of fund managers is set to come innext year, effectively making Switzerland less attractive as ahaven for those looking to escape tough EU rules.

Hiring staff in areas such as technology can be tricky inGeneva, while the Swiss city's more sedate lifestyle is not toeveryone's taste.

"It's good for families - the trains are fast and thecommute is shorter (than in London)," said one Swiss-basedmanager. "Single guys (who moved from London to Switzerland) dowakeboarding and skiing. But they miss the nightlife of London."

Rather than relocating staff to another country, as amultinational company may do, Brevan's policy is to allow staffto choose where they want to be based.

Brevan pays a reported 75 pounds per square foot at BakerStreet, meaning its annual rent is likely to be around 28.5million pounds. Rent would be more like 110-120 pounds persquare foot at the St James's Square site, property agents said.

Brevan is looking for up to 40,000 square feet, two of theagents told Reuters. A typical 40,000 square foot office wouldhold 350-375 people.

The St James's Square development is due to complete latenext year.

Brevan is best known for its $27 billion Master fund, whichhas never had a losing year and which made 21 percent in themarket turmoil of 2008. Last year it rose 12.2 percent, whilethis year it is up 2.05 percent after strong gains in September.

(Additional reporting by Martin de Sa'Pinto in Zurich; Editingby Sinead Cruise and Mark Potter)

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