Hedge fund Brevan Howard is to give £20.1m over eight years to Imperial College Business School in London to set up a research centre in financial economics. The cash gift is one of the largest pledged to a UK business school, matching the £20m naming gift from Wafic Saïd to the University of Oxford in 1996.

The donation for the Brevan Howard Centre for Finance has been spearheaded by Alan Howard, founder of the hedge fund and an alumnus of Imperial College – he studied chemical engineering there for four years. “I think Imperial gave me a great education,” he says. “I found that my engineering education really set me up for what I do now.”

Mr Howard believes the cash gift will help build a business school with a reputation that matches that of the university in medicine, engineering and science. “I think Imperial as a name is a great global name. It’s a fantastic university . . . It would be great if Imperial is correctly regarded as strong in finance as it is in other faculties.”

David Begg, former principal (dean) of Imperial College’s business school and the person most involved in the negotiations, says the scale of the funding will enable the business school to set up a substantial research centre. “It is fantastic to see someone in Europe with the ambitions to be world class,” he says.

The business school is now looking for a founding director for the centre, and there will be “three or four big-hitting senior appointments”, according to principal Dorothy Griffiths. There will also be more junior academic appointments and a PhD programme for between 15 and 20 students.

However the school also hopes to draw on professors from other disciplines in the university, including engineering and computational finance. Though the research agenda of the centre has yet to be decided, its mission is to understand better what drives financial behaviour and thereby to help create a more robust policy underpinning, says Prof Begg.

Prof Griffiths believes the 2008 financial crisis has changed the focus on teaching finance. “I think the crisis has generated a different set of questions than have traditionally been taught in business school,” she says. Mr Howard insists he will take a hands-off approach to the research conducted in the centre.

Mr Howard has become increasingly involved with his alma mater over the past eight years and is now a fellow of the university. He gives several million pounds a year to educational institutions, and has already given £1.5m to Imperial to fund scholarships in the department of energy.

The agreement between the university and the hedge fund is non-exclusive, and Imperial may look for funds from other donors. However, “Brevan Howard will consider more funding if required,” says Mr Howard.

This will be in line with the experience at Oxford’s where Mr Saïd followed his initial £20m gift with a further donation of £15m 10 years later.

This total of £35m makes Mr Saïd one of the largest business school donors in Europe outstripping the donation of £27m by tech entrepreneur Gary Tanaka to Imperial in 2000 to name the business school. Mr Tanaka’s name was subsequently dropped from the school’s title.

However, all this pales into insignificance when compared with donations to US business schools. The record there is held by David Booth, who gave $300m to the University of Chicago in 2008 to rename the school Chicago Booth.