BlueCrest Capital to return $8bn to investors as it goes private

Hedge fund BlueCrest Capital Management said it will return to its clients the $8bn (£5.3bn) it currently manages on their behalf to focus on managing assets solely on behalf of its partners and employees.

The firm said 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.

Taking the firm private and concentrating on a reduced number of funds, managed exclusively on behalf of BlueCrest's partners and employees, will facilitate higher returns and greater profitability for stakeholders, and give it greater flexibility to compete aggressively for trading talent.

Clients are expected to receive around 75% of their investment capital before the end of January and 90% by the end of the first quarter of next year.

BlueCrest said the divestment of investment portfolios will be carried out in an orderly manner, balancing the requirements for speed and value for investors.

Chief executive Michael Platt said that after 15 years of delivering returns to its investors, BlueCrest is now better suited to a private investment partnership model.

“We are embarking on an exciting new phase in the development of BlueCrest. We will be stronger and more flexible under our new business model, and see exciting opportunities to grow significantly in terms of numbers of trading teams and assets under management," he said.

“The new model provides the opportunity to create significant value for our partners, our traders and our staff, due to a step-change in our profitability. It will also allow us to enhance further our ability to attract the highest quality investment talent in markets across the globe.”