BlueCrest’s emerging market traders decamp to Geneva
Moves led by department head have echoes of post-crisis exodus to Switzerland
A team of fund managers at BlueCrest Capital, the publicity-shy investment firm headed by billionaire trader Mike Platt, is relocating to Switzerland, a rare move in an industry that a decade ago saw an exodus of traders to the lower-tax centre.
BlueCrest’s emerging market credit team, comprising a handful of traders based in New York and London, is currently in the process of moving to Geneva, said two people familiar with the firm’s plans.
The relocations have been driven by a desire by the New York-based head of the team to move to Switzerland, the people said. The switches are expected to be completed by the end of the year.
BlueCrest declined to comment.
In the aftermath of the financial crisis, Swiss cantons offered tailored tax deals in an effort to attract hedge fund managers from London — where they were facing a top rate of income tax of 50 per cent and more stringent regulations stemming from Brussels. Alan Howard, co-founder of Brevan Howard, and former JPMorgan trader Mr Platt both moved from the UK to Geneva, taking senior staff with them.
However, a cut in the UK’s top rate of income tax and the introduction of tougher regulation for Switzerland-based funds — as well as complaints from some traders that they found life in the country dull — have since seen that flow of managers dry up and in some cases go into reverse. Mr Platt moved to Jersey in 2014 and Mr Howard moved back to London two years ago.
Following the move by BlueCrest’s traders, the firm’s wider emerging markets team will be split between New York, Geneva and Singapore, said a person with knowledge of the move.
BlueCrest was once one of the world’s biggest and best-known hedge funds, managing as much as $36bn of assets in 2012. Its flagship BlueCrest Capital International macro fund, which bet on moves in global bonds and currencies, returned 45 per cent in 2009 and grew to $14bn at its peak.
However, the firm’s assets shrank to about $8bn following lacklustre performance and the spin-off of Systematica, the quantitative funds arm. At the end of 2015, BlueCrest announced that it would return outside investors’ money and become a private investment partnership managing several billion dollars in assets, a large chunk of which would be Mr Platt’s wealth.
At the time Mr Platt said the fund’s market bets had been constrained by institutional investors’ demand for lower-risk products, and that the change would allow him to take more risk.
Since then BlueCrest has made annual returns net of fees of 50 per cent in 2016, 54 per cent in 2017 and 25 per cent last year, said a person who had seen the numbers. Mr Platt is ranked 38th in this year’s Sunday Times Rich List with an estimated £3.7bn fortune.