Manager Update

Brevan Howard Offshore Management Limited (the "Manager") is manager of all the Brevan Howard branded funds, including BH Global Limited, and has responsibility for allocating capital to the underlying funds in which BH Global invests (the "Underlying Funds") and their investment managers. Gunther Thumann, CEO of Brevan Howard Group Holdings Limited (the Manager's parent company) and Chairman of the Manager's Investment Committee, has provided the following update on the Manager's operations:

All Brevan Howard hedge funds delivered another quarter of solid returns in Q3 2009, as detailed below:

Source: BHAM

*The inception date of Brevan Howard Credit Catalyst Fund Limited Class A USD Shares was 1st August 2009.The monthly return for July 2009 represents the performance of the USD Class X Shares of Brevan Howard Credit Catalysts Master Fund Limited. Class X Shares are subject to a 20% performance fee, but no management fees are payable thereon. Therefore a simulated management fee of 2% per annum has been applied to the performance presented in this document for this period. No investor has received the above returns on a stand alone basis.

So far this year the Brevan Howard funds have experienced investment inflows of approximately $5bn (as 1 October 2009). These inflows, together with performance take the total assets under management of the Manager to over $25.7bn (as at 30 September 2009).

The investment managers to which we currently allocate assets are Brevan Howard Asset Management LLP, based in London, Brevan Howard (Hong Kong) Limited, based in Hong Kong and Brevan Howard (Israel) Limited, based in Tel Aviv. In addition, the Manager recently made an allocation to Brevan Howard Investment Products Limited, based in St. Helier, following the expansion of its operations in Jersey. 

We are also considering the establishment of additional affiliated investment managers in Singapore and/or Geneva. These jurisdictions have been chosen because they offer high quality infrastructure and a stable legal and regulatory environment. 

We believe that opening these offices will assist the Manager in attracting new talent and will also enable us to retain the services of existing Brevan Howard personnel who may wish to move to these jurisdictions. We will continue to seek further opportunities to avail our Funds of leading trading talent on a global basis; and to continue to broaden our investment management base commensurate with the growth of our assets under management.

Some investors have raised the issue of the size of the AUM at Brevan Howard, and especially the size of Brevan Howard Master Fund Limited (the "Master Fund" or "BHMF"). We remain confident that the current opportunity set remains exceptionally rich for all our Funds. The Master Fund in particular is having no trouble generating returns on its current assets. The NAV/Share of Brevan Howard Fund Limited USD Shares has appreciated 17.60% YTD (as at 23 October 2009), even with much reduced balance sheet and gross exposures. The Master Fund's balance sheet is now approximately $17bn versus $62bn in January 2008 and gross interest rate swap risk is now 15% of the January 2008 level. The Master Fund has also essentially exited long-dated short option and other illiquid derivative positions. 

If and when we sense that a fund cannot deliver an attractive return because of the size of its assets relative to market opportunities, we intend to recommend to that fund's board to return capital to investors. For the time being however, we remain sanguine about the size of our AUM and confident that we can continue to generate attractive returns for our investors.

Investment Manager Update

Brevan Howard Asset Management LLP ("BHAM") currently manages the largest allocation of the Underlying Funds' assets. BHAM's CIO, Alan Howard, has provided the following update to the Manager on BHAM's operations in the quarter:

I'm delighted to report that BHAM has been able to significantly strengthen and deepen its senior trading team over the summer. In particular, we were very fortunate to have Mark Hillery join us from Tudor Capital Management and Fabrizio Gallo join us from Morgan Stanley. 

Mark was a senior partner and head of emerging markets trading at Tudor. I have known Mark for over fifteen years and had worked with him for seven years at Tokai and CSFB, prior to his joining Tudor. I know him to be an outstanding trader and I am confident that he will make a substantial contribution to the firm. Mark joins us as a Partner and senior macro trader.

Fabrizio was most recently global head of equities at Morgan Stanley where he led one of the world's largest and most profitable equity franchises. Fabrizio joins us as a Partner and Head of Equities. In this capacity, he will take over the investment management of the Brevan Howard Equity Strategies Master Fund Limited, as well as build out a more meaningful equity trading effort for BHAM generally. Fabrizio not only brings his skills in the equity space to the firm, but also his broad insight into capital markets and his experience in managing a large and complex global business. I have no doubt that he also will make a substantial contribution to the firm. 

On a less positive note, we remain concerned about the potential impact of the EU Directive on the regulation of Alternative Investment Fund Managers and have been working with regulators, politicians and industry bodies such as AIMA to articulate these concerns. As I've often said, we at BHAM welcome effective regulation. We also understand that, as one of the largest hedge fund managers in the world, we have a responsibility to engage with regulators, central banks and governments to assist in any way possible in helping them understand what we do and to minimise systemic risk. To that end, I have joined the Investor Advisory Committee on Financial Markets which was established by the Federal Reserve Bank of New York. The role of this committee is to discuss financial, economic and public policy issues and advise the New York Fed on developments and issues arising in the asset management industry. We've also made ourselves available to any regulators or government body that wants to understand what we do. 

However we regard the current draft of the EU Directive as simply unworkable and in need of significant amendment. Over the last several months of discussions with regulators we have become increasingly comfortable that there is in fact no desire to harm the hedge fund industry and that there is broad acceptance that amendments must be made. We are therefore hopeful that the final form of the Directive will be sensible and proportionate; but we believe that it is important for all stake holders in our industry to continue to engage with regulators to ensure that whatever regulation is ultimately enacted does not do unintended damage. 

In terms of outlook, I don't think there has ever been a time when two extreme outcomes - an inflationary spike or deflationary bust - could be simultaneously argued with such great plausibility.  The recovery we've had in financial markets has been almost entirely due to the massive policy response over the last year. The ultimate outcome of that response is simply unknowable. The only thing we're pretty confident about is that there will be a great deal of volatility over the next several years as market participants try to guess what policy makers are going to do next, when policy makers themselves likely have little idea what their next steps will be. 

This environment of uncertainty and volatility is one in which we believe we can thrive; and as I've written in past letters, I am sure we have the team in place to exploit the opportunities that will unfold. 

As always, I thank all of our investors for their continued support and I look forward to updating you again with a 2009 year-end letter in January 2010.

Monthly Performance Commentaries
for Underlying Funds

* The USD currency class of each Underlying Fund is used as a proxy for the performance of each of the Underlying Funds; BHGO also invests in the EUR and GBP of the Underlying Funds.

Source: MTD performance data is provided by the Administrator, International Fund Services (Ireland) Limited ("IFS"). MTD performance data is net of all investment management fees and all other fees and expenses payable.  PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Brevan Howard Master Fund Limited ("BHMF")

The NAV per share of BHMF USD Class Y Shares gained 1.44% in September. BHMF made most of its profits for the month in fixed income directional, curve and volatility strategies. Fixed income relative value and credit strategies also contributed positively to P/L. To a lesser extent, profits were made in FX and equity. Small losses were incurred in commodities.

Brevan Howard Asia Master Fund Limited ("BHAMF")

The NAV per share of BHAMF USD Class X Shares gained 0.06% in September. BHAMF's P/L on the month was approximately flat with no significant positive or negative contributions from any of the underlying strategies.

Brevan Howard Equity Strategies Fund Limited ("BHES")

The NAV per share of BHES USD Class A Shares gained 2.94% in September. Positive performance came mainly from emerging market plays, most notably in Russia and China, as well as net longs in financials, materials and consumer sectors.

Brevan Howard Emerging Markets Strategies Master Fund Limited ("BHEMS")

The NAV per Share of BHEMS Class X Shares gained 2.65% in September. During the month, credit strategies were the best performing but BHEMS's equity relative value theme also contributed positively to performance. The FX and the convexity overlay books were flat on the month.

Brevan Howard Strategic Opportunities Feeder Fund Limited ("BHSOFF")

The NAV per share of BHSOFF Class A USD Shares rose by 3.70% in September. During the month, Brevan Howard Strategic Opportunities Fund Limited made money predominantly in fixed income relative value strategies and, to a lesser extent, in volatility and fixed income directional and curve trades.