Exclusive: BlueCrest to open $1 billion equity hedge fund to investors in April - sources

LONDON (Reuters) - BlueCrest, the $14 billion hedge fund firm led by billionaire Michael Platt, is to open its high-performing equity fund to outside investors, marking a new attempt by one of Europe’s biggest hedge funds to expand into the asset class

The BlueCrest Equity Strategies fund has operated with its own capital of $1 billion until now but plans to accept its first money from third parties from April, sources familiar with the matter told Reuters.

BlueCrest aims to double the fund’s assets in a first fundraising round after delivering annualized returns of 11.8 percent, with volatility of 6 percent, since the fund was launched in July 2013.

The fund returned 9.3 percent last year, marketing material for the fund seen by Reuters showed, more than twice that for the Eurekahedge Hedge Fund Index.

Ed Orlebar, a spokesman for BlueCrest declined to comment.

The move into equities bolsters BlueCrest’s product line which until now had focused on asset classes such as interest rates, fixed income and credit.

It also highlights a broader trend in the industry where big hedge funds are strengthening their product range to attract capital from institutional investors that have boosted the industry’s assets to almost $3 trillion.

The new equity fund’s performance provides a much needed boost for BlueCrest, which has had weak returns from its flagship macro fixed income fund.

The BlueCrest Capital International, the firm’s flagship fund managed by Platt, gained 0.1 percent in a tough 2014 for macro hedge funds and was down 5.5 percent in the first two months of the year, according to data seen by Reuters.

Its multi-strategy AllBlue Fund was up 1.6 percent in the first two months of the year after gaining 6.3 percent in 2014.

Also, in January, BlueCrest lost its computer-driven trading team led by high-profile hedge fund veteran Leda Braga, when this business was spun off.

The separation cost BlueCrest $8.9 billion in assets which followed Braga to her new firm Systematica Investments. BlueCrest retains a stake in Systematica.

BlueCrest’s assets have fallen to $14 billion from a peak of $37 billion in 2013, according to data seen by Reuters.


The new equity fund is a return to BlueCrest’s roots with a multi-manager approach, hiring 30 teams to run different strategies, a model similar to that of multi-billion dollar peers Millennium and Balyasny Asset Management.

BlueCrest’s earlier foray into equities, which ended in 2007, had been based on a fund led by a single manager.

The team, spread across London, New York, Hong Kong and Singapore is headed by Christian Dalban, the former global head of equities trading at Nomura that BlueCrest had hired in 2013. He will manage and hire staff and allocate capital to different managers but will not trade himself, the sources said.

The fund is expected to grow beyond its $2 billion goal, the sources said, and as it grows more trading teams will be added.

BlueCrest’s equity fund makes money by betting on share price moves and investing around corporate events such as mergers and acquisitions.

Platt made his push into equities in 2013 by taking a $750 million loan from 16 banks to start the team and hired dozens of traders. He repaid the loan last year, the sources said.

Initial hires were London-based Dalban, who was head of Europe for Millennium between 2008 to 2010 and whom Platt has known for more than 20 years.

Dalban’s former colleague Jonathan Larkin, who headed the Americas equities trading at Nomura, had also joined the team in New York. He left last year.

James Chen, former head of program trading and Delta One in Asia ex-Japan at Barclays, joined the team last year as head of the Asia desk.

Editing by Sinead Cruise and Jane Merriman