Brevan Howard settles dispute with star trader Rokos

Hedge fund group Brevan Howard has made peace with its former star trader Chris Rokos, and agreed to help him set up his own business, ending a legal battle that had threatened to spill over into a high-profile court case.

Last year, Mr Rokos - who was a founding partner of Brevan Howard when it was set up in 2002 and earned about $900m over 10 years before leaving in 2012 - lodged a case against his former employer to overturn a five year non-compete clause in his contract.

But on Wednesday both parties issued a statement saying they had reached a settlement allowing Mr Rokos to launch his own asset management business, with his first fund becoming operational at the start of next year. Brevan Howard added that it was taking an unspecified financial stake in the new business, as well as providing support to set it up.

Settling with Mr Rokos removes a distraction for Brevan Howard at a time when its flagship Master Fund has suffered its first annual loss in its 12-year history, and its total assets under management have shrunk from around $40bn last year to less than $30bn.

It also allows the ultra-private hedge fund, co-founded by the British billionaire Alan Howard, to avoid airing any more details of its inner workings in public.

Initial court filings from Mr Rokos had provided some insights into the immense earning power of Brevan Howard's top traders. They showed that he had been paid about $900m in his time there, having become one of the hedge fund company's main money makers. In 2011, the year before he left, he generated $1.2bn in trading profits - or 30 per cent of the returns for Brevan's main fund that year.

Mr Rokos became one of the co-founders of the company when it was set up by Mr Howard in 2002, and his surname provides the "R" in the acronym that forms the first part of the hedge fund's name. He had previously worked with Mr Howard when both were proprietary traders at Credit Suisse in London.

Since leaving, Mr Rokos has been managed his personal wealth through a well staffed family office business, which is expected to form the basis of his new hedge fund when it is opened up to outside investors.

In a statement, Mr Rokos said "I look forward to a regular dialogue with Alan, something I have valued greatly ever since we started working together".

Mr Howard said: "This new relationship is one from which everyone will benefit. Chris is an exceptional trader, and I am confident he will be successful in his new venture."

Before the settlement was reached, Mr Rokos' lawyers had argued that the five-year non-compete clause in his Brevan Howard contract constituted a restraint of trade, and noted that in the ban would mean "the public . . . will be deprived of [Mr Rokos's] skills and hard work for period in excess of five years".

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