Rokos Picks Prime Brokers For $1.5 Billion Hedge Fund Rokos Picks Prime Brokers For $1.5 Billion Hedge Fund

Star hedge-fund trader Chris Rokos has tapped Deutsche Bank AG and Bank of America Corp. as the main brokers for his new hedge fund, according to two people familiar with the matter.

Mr. Rokos, a co-founder of hedge fund Brevan Howard Asset Management, launched Rokos Capital Management in London at the end of September with around $1 billion in assets and has since attracted more than $500 million from Blackstone Group L.P. Mr. Rokos made billions of dollars for Brevan Howard while trading there.

Deutsche Bank and Bank of America beat stiff competition from other so called prime-brokers to win business from the high-profile trader, according to hedge fund industry sources.

Prime brokers, which are usually large banks, can provide a range of services to hedge funds such as securities lending, financing, trade execution, introducing new clients and even renting out office space. Winning such hedge fund business is potentially lucrative for banks, who can earn tens of millions of dollars or more from large clients over the course of a year.

Morgan Stanley, Goldman Sachs and Deutsche Bank are the three leading prime brokers in Europe, according to data group Coalition.

Bank of America's prime brokering presence in Europe is relatively small. It ranks in the third tier of prime services, according to Coalition's rankings for Europe, Middle East and Africa, both for 2014 and the first half of this year.

Bank of America declined to comment.

The mandate comes during a tough period for Deutsche Bank, which is cutting thousands of jobs and slimming down some operations. The bank, which is ranked third in the top tier of EMEA prime services by Coalition for the first half of this year, had a relationship with Mr. Rokos through his family office before the launch of his hedge fund.

A spokesman for Deutsche Bank declined to comment.

A spokesman for Rokos Capital Management declined to comment.

The Rokos launch comes as Mr. Rokos' former employer Brevan Howard recently cut at least 10% of its roughly 400-strong workforce after shutting a number of funds. Its flagship Master fund suffered its first-ever calendar year loss last year and has seen clients exit. This year it is up 0.3% to November 6.

In January Mr. Rokos and Brevan co-founder Alan Howard settled out of court a public spat over a noncompete agreement. Mr. Howard agreed to invest some of his own money in Mr. Rokos's fund.

Mr. Rokos, whose fortune is estimated at £ 400 million ($609 million), according to the Sunday Times Rich List for Britain, is well-known as a major donor to Britain's ruling Conservative Party. The Rokos Quad, a new courtyard at Oxford University's Pembroke College, to which he made a large donation, is named after him.

Write to Laurence Fletcher at [e-mail]

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November 13, 2015 11:15 ET (16:15 GMT)

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