Announced Tuesday, Michael Platt’s $8bn (£5.3bn, €7.56bn) business is to change structure to a ‘private investment partnership’, focussing “solely on the management of its partners and employees” and pushing out third-party investors.
Platt blamed recent industry developments including “downward pressures on fee levels, the increasing cost of hiring the best portfolio management talent and the difficultly in tailoring investment products to meet individual needs”.
He also spoke of “constraints of a large number of diverse investors, [which] have all significantly reduced industry profitability and flexibility”.
Around three-quarters of redemption proceeds is expected to be paid to investors before the end of January, growing to 90% by the end of the first quarter 2016.
Third-party investors in the BlueCrest Emerging Markets, Equity Strategies, Credit, Mercantile, Quantitative Equity funds, as well as the BlueTrend suite – managed by Systematica Investments – can expect to be redeemed beginning 4 January.
Formed in 2000, BlueCrest reportedly ran around $36bn at its peak in 2012.
Platt was quoted in the Financial Times: “It is no longer a particularly profitable business to run a multi-manager hedge fund on 2 and 20% fees.
“Instead we are happy to be our own client and run our own amount of leverage. We are going from earning 2 and 20 on clients’ money to earning 0 and 100 on our own.”
