Four of six BlueCrest Capital strategies were positive in December, with the hedge fund operator’s BlueCrest Capital International and BlueTrend finding difficulty.
BlueCrest Capital International operates a strategy along the yield curve and is managed by Michael Platt, the founder of BlueCrest, now the world’s third-largest hedge fund with a reported $34 billion under management. BlueTrend is the managed futures hedge fund operated by former JPMorgan quantitative analyst Leda Braga and, despite posting -11.3% in 2013, has generated a reported 11% annualized return since its founding in 2004.
BlueCrest Multi-Strategy Credit fund gained 1.8% in December, as credit markets were strong after tapering fears receded. “The fund made returns from both investment grade and high yield credits and across most strategies,” a press release said. “Sentiment and corporate news continues to provide positive impetus as we enter 2014 but, with long term rates firming and many credit markets richly valued, the chance of a sharp reversal is mounting. As a result, the portfolio has balanced positioning and has short positions in a number of overvalued pockets to guard against the downside.”
BlueCrest Capital adding jobs
While BlueCrest’s primary European competitor Brevan Howard is shedding jobs, BlueCrest continues to add head count. “During the past year BlueCrest has continued to invest heavily in personnel and infrastructure to underpin the management of the funds,” the report said. “Staff numbers are now close to 600. In addition to a new office in Sao Paulo, most recently BlueCrest has launched an office in Toronto for Canadian rates trading.”
Interest rate SWAPs trader known for hedging OTC risk
Platt started his career in 1991 at JPMorgan and ultimately worked on the bank’s derivatives desk, where he earned a name for himself as someone adept at trading SWAPs with appropriate hedging strategies. The ability to properly hedge SWAPs interest rate risk is a key component of success and the topic of much discussion when considering the risk in an OTC SWAPs portfolio. Platt is said to hold firm to the hedge fund’s 2% management fee and 20% incentive fee and is legendary for turning down money on lesser terms.