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Legendary Hedge Fund Calls It (Semi) Quits: $8 Billion BlueCrest To Return Outside Client Money
Hedge funds are dropping like flies now.
Following news that both Ackman and Einhorn have suffered dramatic losses, in the -20% ballpark YTD, and after reporting that numerous metal-focused commodity hedge funds have liquidated in recent months, most notably Trafigura's own Galena, the latest firm to wave the flag of surrender to the forced of central planning is none other than Michael Platt's legendary $8 Billion BlueCrest Capital, which until recently was the third largest hedge fund in Europe, and as recently as two years ago was the topic of the Bloomberg profile "BlueCrest Builds a Hedge Fund Empire", will return a whopping $7 billion of its current $8 billion AUM held currently in the form of outside money.
Just hitting the headlines:
- MICHAEL PLATT'S BLUECREST TO RETURN ALL OUTSIDE CLIENT MONEY
- BLUECREST CAPITAL MANAGEMENT TO BECOME PRIVATE INVESTMENT PARTN
- BLUECREST HAS $8B AUM, $7B IS SAID TO BE OUTSIDE MONEY
- BLUECREST: CLIENTS TO GET 75% INVESTMENT CAP BEFORE JAN END
- BLUECREST: CLIENTS TO GET 90% INVESTMENT CAPITAL BY END OF 1Q
- BLUECREST SAYS BSMA TO CONTINUE TO HOLD CERTAIN MANAGED ASSETS
From the press release:
BlueCrest Capital Management Limited "BlueCrest" announces it will, over the next several months, transition to a Private Investment Partnership, and will return to its clients the $8 billion it currently manages on their behalf. Following the transition, BlueCrest will manage assets solely on behalf of its partners and employees.
It will continue to trade all current major strategies and retain all the firm's offices around the world and anticipates strong growth in employees and AUM over the next several years under the new business model.
During its 15 year history, BlueCrest has delivered trading profits of over $22bn for its investors, and has won numerous industry awards for excellence. It has built an industry leading global team of over 250 investment professionals in nine offices operating in fixed income, currencies, emerging markets, credit and equity trading.
However, ongoing secular changes in the industry, including trends in fee levels, the cost of hiring the best trading talent, and the challenges in tailoring investment products to meet the individual needs of a large number of investors, have weighed on hedge fund profitability. A Private Investment Partnership strategy of concentrating on a reduced number of funds, managed exclusively on behalf of BlueCrest's partners and employees, will facilitate higher returns and greater profitability for the firm's stakeholders, and give it greater flexibility to compete aggressively for trading talent.
BlueCrest's existing partner fund, BSMA, will continue to hold assets managed in the fixed income, currency and credit trading strategies, and the BlueCrest Equity Strategies Fund and the BlueCrest Emerging Markets Fund will be retained as the vehicles through which partners and employees invest in equity market and emerging market trading strategies respectively. All other funds, including BlueCrest Capital International, and the AllBlue Fund, are expected to close during 2016.
The process of closing the client funds has been agreed with the Boards of Directors of those funds and communications with clients as to the timetable is now taking place. Clients are expected to receive approximately 75% of their investment capital before the end of January and 90% by the end of Q1 2016. The divestment of investment portfolios will be carried out in an orderly manner, balancing the requirements for speed and value for investors.
BlueCrest's founder and Chief Executive, Michael Platt, said:
"Firstly, I would like to thank all of the investors who have entrusted money to the BlueCrest funds over the last 15 years and to wish them well in their future investment endeavours."
"We are embarking on an exciting new phase in the development of BlueCrest. We will be stronger and more flexible under our new business model, and see exciting opportunities to grow significantly in terms of numbers of trading teams and assets under management. The new model provides the opportunity to create significant value for our partners, our traders and our staff, due to a step-change in our profitability. It will also allow us to enhance further our ability to attract the highest quality investment talent in markets across the globe. We have delivered industry-leading returns to our investors over the past 15 years but believe that BlueCrest is now better suited to a Private Investment Partnership model.
We have always been an industry innovator, and this transition will be no exception. We have sold and repurchased a stake in our business, we have seeded new strategies using bank loan financing, and been among the first to launch a permanent capital vehicle in the UK. We seeded and spun out BlueMountain Capital and more recently have spun out and divested of a significant stake in Systematica, a major business division. This transition, though not unique, will make us one of the largest and most diverse managers to adopt a Private Investment Partnership model."
* * *
BlueCrest Capital Management, one of the world's premier hedge fund managers, was founded in 2000 by Michael Platt, and manages c. $8bn of assets. With an award-winning reputation for excellence BlueCrest combines a "specialist portfolio management approach", tight risk management and research excellence. BlueCrest has c.570 members of staff located in offices in Jersey, London, New York, Geneva, Singapore, Hong Kong, Boston, Westport and Toronto.
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These guys are taking the money and running. Maybe those stories about an impending World War Three are right. Time to find a bolt hole and move in, far away from Wall Street.
When even the pros are finding it hard to manage money in a manipulated world, meaning the rats are leaving the ship, maybe "We the People" should start considering alternatives to the status quo?
<How about a 'victory' garden in the back yard? A little self sufficiency never hurts.>
"We are embarking on an exciting new phase in the development of BlueCrest. We will be stronger and more flexible under our new business model, and see exciting opportunities to grow significantly in terms of numbers of trading teams and assets under management. The new model provides the opportunity to create significant value for our partners, our traders and our staff, due to a step-change in our profitability. It will also allow us to enhance further our ability to attract the highest quality investment talent in markets across the globe. We have delivered industry-leading returns to our investors over the past 15 years but believe that BlueCrest is now better suited to a Private Investment Partnership model."
Cognitive Dissonance,
Now, if the above (especially, the highlighted words) does not convince you of the fact that BlueCrest (or whatever hedge fund) is positioning itself to be better, faster, stronger, and talented, then I am not sure what evidence would sway your views! These guys are not "finding it hard" to manage money, they just realized that they did not need all that money in order to kick ass and bring home pork. Synergy anyone?
/S
all these guys ditch their hedge funds once the "high water mark" gets too far away, if they think there are several years of no 20% they bail, hedge funds are a joke
Yup. This guy knows iits all bullshit. Who needs a Hedge fund money manager when prices are determined not discovered ?? The way i see it the only way ANY pro would have a dime in this crime is if he got "the jew call" . As far as "markets" go what weve had for so many years is the smart get punished and get a gallon of Malt Liquor, Bongs on the couch for the weekend. The stupid or ones with inside knowlege what the fed programmed the SP to finish today get rewarded
Too much regulation in this business is creating these type of "fold and run away" situations. Clearly all this regulation is a negative for investors and such
The only reason Investors are important to a Hedge Fund is for AUM. I read this news is that these guys are so freaking rich already they don't need the cash and what is the point of dealing with asshole investors.
They can also structure their funds in any way as to minimise/avoid taxes. Translation, increase the shit out of Management and Performance Fees (domiciled in some off-shore taxhaven) skimming off the top. Who then cares about generating alpha as long as they break even.
Bottom line, more for me and less for you.
Humans selling stocks, the Fed buying stocks covertly. That's what's been happening since August 24,2015.