9 Apr 2010
An operational restructuring at BlueCrest Capital Management, Europe’s third biggest hedge fund operator with nearly $19 billion in assets under management, will see CEO Mike Platt and Leda Braga, who heads systematic trading, leave London for Geneva. News of the changes is contained in a letter sent to investors by Platt and seen by The Hedge Fund Journal.
The opening of the Geneva trading centre coincides with BlueCrest completing a legal reorganisation that has established a new group head office in Guernsey. The moves have been formalised just days before a new 50% UK personal income tax regime affecting high earners is due to become law. Though only about 70 of BlueCrest’s 300-plus staff are leaving, those departing include most of the firm’s key partners and many of its portfolio managers.
BlueCrest will no longer being regulated by the Financial Services Authority though it will continue to be registered as an investment advisor with the Securities and Exchange Commission in the US and is to be authorised by the Guernsey Financial Services Commission. In a bid to reassure investors the letter from Platt noted: “However, overall, we intend to operate the entire business consistently with the relevant provisions of FSA regulatory framework under which we have operated since inception.”
Platt termed the establishment of a second investment management operation in Europe “an obvious next step” for BlueCrest building on its US investment desk. “The implementation of this strategy increases our options for future growth and also serves to reduce the business risk of over-dependency on a single jurisdiction,” he said.
Among trading desks, the Credit team is to be solely located in Geneva with the Mercantile team to remain in London. Within the Systematic business, headed by Braga, the majority of professionals have already relocated to, or shortly will be based in, Geneva. The transfers include the majority of the Modelling and Trade Implementation teams, including the heads of both of these groups, as well as the entire execution team.
Teams including Emerging Markets and FX, which already operate effectively on a dual location basis between London and New York, will continue with those arrangements. Meanwhile, the Rates and Fixed Income Relative Value teams will be approximately evenly split between London and Geneva and retain a critical mass in both locations.
Platt, who said that the operation of the firm’s risk management had occasioned queries from investors, added that the firm’s core risk discipline on discretionary trading of applying tight stop losses to specialist traders overseen by partner-level desk heads, won’t be affected by the changes. The seven-person independent risk management group headed by Matthew Weir will remain based in London, although Weir and Ronan Cantwell, who has responsibility within the risk team for the Rates and Relative Value desks, will visit Geneva frequently. “We anticipate holding the majority of the fortnightly risk committee meetings in person in the Geneva office,” Platt added.
The opening of the Geneva trading centre coincides with BlueCrest completing a legal reorganisation that has established a new group head office in Guernsey. The moves have been formalised just days before a new 50% UK personal income tax regime affecting high earners is due to become law. Though only about 70 of BlueCrest’s 300-plus staff are leaving, those departing include most of the firm’s key partners and many of its portfolio managers.
BlueCrest will no longer being regulated by the Financial Services Authority though it will continue to be registered as an investment advisor with the Securities and Exchange Commission in the US and is to be authorised by the Guernsey Financial Services Commission. In a bid to reassure investors the letter from Platt noted: “However, overall, we intend to operate the entire business consistently with the relevant provisions of FSA regulatory framework under which we have operated since inception.”
Platt termed the establishment of a second investment management operation in Europe “an obvious next step” for BlueCrest building on its US investment desk. “The implementation of this strategy increases our options for future growth and also serves to reduce the business risk of over-dependency on a single jurisdiction,” he said.
Among trading desks, the Credit team is to be solely located in Geneva with the Mercantile team to remain in London. Within the Systematic business, headed by Braga, the majority of professionals have already relocated to, or shortly will be based in, Geneva. The transfers include the majority of the Modelling and Trade Implementation teams, including the heads of both of these groups, as well as the entire execution team.
“In determining which trading desks would be established in Geneva, we have been very focused on ensuring that the overall investment process would not be adversely affected,” Platt told investors. “In the case of several teams, we have deemed it important at this stage to maintain single location capability.”
Teams including Emerging Markets and FX, which already operate effectively on a dual location basis between London and New York, will continue with those arrangements. Meanwhile, the Rates and Fixed Income Relative Value teams will be approximately evenly split between London and Geneva and retain a critical mass in both locations.
Platt, who said that the operation of the firm’s risk management had occasioned queries from investors, added that the firm’s core risk discipline on discretionary trading of applying tight stop losses to specialist traders overseen by partner-level desk heads, won’t be affected by the changes. The seven-person independent risk management group headed by Matthew Weir will remain based in London, although Weir and Ronan Cantwell, who has responsibility within the risk team for the Rates and Relative Value desks, will visit Geneva frequently. “We anticipate holding the majority of the fortnightly risk committee meetings in person in the Geneva office,” Platt added.
“We see this expansion as a logical step as the business grows, and one which will position us to continue to build our talent pool in both Discretionary and Systematic trading,” Platt said. “Our trader hiring so far in 2010 has resulted in further additions, in London, in Rates and Emerging Markets, and we are in active discussions with others for whom the prospect of a Geneva location is a significant attraction versus other opportunities - so already the benefits of a diversified business establishment are being felt.”
