London Borough of Croydon Pension Fund will double its investment with BlueCrest Capital Management, the hedge fund firm started by Michael Platt, after the £635 million ($986 million) pension fund pulled its money from Fauchier Partners.
The program will put £14 million ($22 million) with BlueCrest after terminating its investment with Fauchier because of poor returns, Nigel Cook, Croydon's head of pensions and treasury management, said by telephone.
“Performance was the key factor,” Mr. Cook said of the decision. “It was disappointing, and board members felt that they were looking for something more from Fauchier.” He wouldn't give details of Fauchier's returns, citing a confidentiality agreement with the fund manager.
Croydon put £14 million in BlueCrest's AllBlue Fund, which invests in other BlueCrest hedge funds, in December 2009. At the same time, it invested a similar sum in Fauchier's Jubilee Absolute Return Fund, a hedge fund of funds.
Pension fund officials have yet to decide whether to add to its existing holding in AllBlue or invest in another fund managed by BlueCrest, Mr. Cook said. Croydon has no plans to expand its hedge fund investments beyond the current amount, he said.
Permal Group, a unit of Legg Mason Inc., acquired Fauchier Partners in March. Mr. Cook said that takeover wasn't a factor in the decision. Alastair Crabbe, a spokesman for Permal, and Ed Orlebar, a spokesman for BlueCrest, both declined to comment.