Platt’s $50 Billion Hedge-Fund Dream Deferred
When billionaire Michael Platt flew to the Middle East in September 2013, he was running one of the world’s largest hedge funds. He wanted to make it bigger.
He told investors at the region’s sovereign-wealth funds that his BlueCrest Capital Management LLP was doing great, according to someone briefed on the discussions. Platt described how he would expand the firm, whose assets had peaked that May at more than $37 billion, to $50 billion, the person said.
Today, BlueCrest is managing half that amount and will lose about $8.9 billion more when quant-trading head Leda Braga leaves with her funds to start her own business in January.
Aksia LLC, which advises funds and pensions including the New York City Employees’ Retirement System, cut its rating of BlueCrest to uninvestible, a person with knowledge of the move said last week.
The firm’s primary focus has never been about increasing assets under management, Dodd said, adding that Braga’s departure was “categorically a collective decision.” Ed Orlebar, a spokesman for London-based BlueCrest, declined to make Platt and Braga available for comment.
Some bankers who do business with BlueCrest say they have never spoken to him and were in contact with two deputies or Braga instead. Investors watched Platt introduce himself several years ago to BlueCrest’s risk manager, not realizing who he was, according to a person who witnessed the exchange.
Platt shared his thoughts on leadership in “Hedge Fund Market Wizards,” a 2012 book of interviews that featured him.
“I look for the type of guy in London who gets up at 7 o’clock on Sunday morning when his kids are still in bed and logs onto a poker site so that he can pick off the U.S. drunks coming home on Saturday night,” Platt said. “I hired a guy like that. He usually clears 5 or 10 grand every Sunday morning before breakfast.”
News of BlueCrest’s proprietary fund surfaced when Albourne Partners Ltd., whose clients include pensions and endowments, said in February it learned the firm has a $1.5 billion internal fund called BSMA Ltd. Citing concern that it could lead management to put its interests ahead of investors, Albourne lowered its rating.
The Indiana pension fund is pulling $193.5 million it had invested in BlueCrest International and BlueTrend “due to other opportunities that are expected to constitute a better long-term fit,” according to an investment update presented to its board Oct. 31.
Brevan Howard’s Master Fund, a macro fund run by Alan Howard, is down 2.3 percent through Oct. 24, according to a person familiar with the firm.
BlueCrest’s BlueTrend fund has jumped 8.3 percent this year. BlueMatrix, which Braga also runs, has climbed 7.6 percent, the Multi-Strategy Credit Fund has returned 6.3 percent and AllBlue (BABS) is up 4.9 percent, investor letters show. The hedge-fund industry posted an average 2.3 percent gain this year through September, Bloomberg data show.