BlueCrest: the perks are fantastic
Even in a less-than-explosive year for hedge funds (unless maybe you work somewhere such as Coatue Management or WorldQuant), DD imagines the benefits of working at home are pretty grand: a more relaxed dress code, martini lunches, hefty end-of-year bonuses . . . the list goes on.
Arguably, such dividends are even more commonplace on the new work-from-home frontier.
One enduring perk of working at BlueCrest, the London-based hedge fund led by billionaire trader Mike Platt, was the internal fund set up in 2011 to manage employees’ money as an incentive to retain talent at the firm.
But in 2015 the $2bn employee hedge fund, known as BSMA, was generating far more than the firm’s flagship client fund, BlueCrest Capital International, the FT’s Miles Johnson revealed.
Meanwhile, BSMA was ranked as one of the best performers in the world for three years running as of December 2015. BlueCrest returned all outside money to focus on managing the wealth of Platt and other staff amid an exodus of dissatisfied clients.
Five years later the enviable workplace benefit has come back to bite.
In a settlement reached on Tuesday with the Securities and Exchange Commission, BlueCrest will return $170m to its former investors, who the US regulator says were left to rely on an underperforming algorithm while the hedge fund put its top traders on the BSMA desk.
The SEC order, which BlueCrest neither admits nor denies, focuses principally on disclosure to investors in BlueCrest Capital International, and does not allege any intentional misconduct.