BlueCrest Capital Management will return $8 billion to external investors, many of them institutional investors, as the firm transitions to being a family office over the next few months.
Investors will receive 75% of their assets before Jan. 31, and 90% by the end of March, winding down the portfolios “in an orderly manner, balancing the requirements for speed and value for investors,” according to a company statement.
All but three of BlueCrest hedge funds will be closed. BlueCrest will manage “several billion dollars,” a company spokesman said, in its BlueCrest Staff Managed Account (exclusively for partners' investments to date), BlueCrest Equity Strategies Fund and BlueCrest Emerging Markets Fund.
Despite having produced $22 billion of profits for its investors since CEO Michael Platt founded the firm in 2000, “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,” the statement explained.
The move to a private investment partnership, family-office structure, concentrating on managing fewer funds exclusively for BlueCrest's partners and employees, “will facilitate higher returns and profitability for the firm's stakeholders,” the statement said.
“We have delivered industry-leading returns to our investors over the past 15 years, but believe BlueCrest is now better suited to a private investment partnership model,” Mr. Platt said in the statement.
In December 2014, BlueCrest spun out its computer-driven hedge funds — BlueTrend Fund and BlueTrend 2x Leveraged Fund with $8.3 billion under management — into a separate investment firm, Systematica Investments.
Investors in BlueCrest hedge funds include the $79 billion New Jersey Pension Fund, Trenton; the $25.2 billion Texas County & District Retirement System, Austin; the $14.2 billion New Mexico Public Employees Retirement System, Santa Fe; and the $4.2 billion Colorado Fire & Police Pension Association, Greenwood Village.