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BlueCrest generates a 130m profit
[October 06, 2007]

BlueCrest generates a 130m profit


(Business, The (London) (KRT) Via Thomson Dialog NewsEdge) Oct. 6--Partners in BlueCrest Capital Management, Europe's third largest hedge fund, shared almost 130m ($263m, E186m) in the year ending 30 November 2006, according to results just filed with Companies House.



Founders Michael Platt and Bill Reeves, two former JPMorgan traders, own 70 percent of BlueCrest, indicating that they were entitled to just over 90m, which the accounts say was allocated to other members of subsidiary undertakings. Man Group, the FTSE 100 hedge fund giant, has a 25 percent stake in the business.

BlueCrest generated management and performance fees of 183m in the year to November, up 41 percent from the previous year. The sharp increase in fee income was the result of an influx of new funds worth more than $5bn, taking total funds under management to more than $11bn.


Shortly before the accounts were drawn up, BlueCrest closed its California office and parted company with chief trader Yunho Song after he sustained losses in August 2006 by making a wrong bet on Japanese interest rates. As soon as a trader loses more than 3 percent-4 percent of their allocated capital, BlueCrest withdraws their trading capital.

Last month, BlueCrest closed its $550m Equity Fund, claiming its average 5.3 percent annual net return over the past three years was unacceptable. It anticipates outflows of less than $100m as a result of this action.

Man Group acquired its stake in 2003 for 105m, putting a then notional value of 420m on BlueCrest. At the time, the hedge fund had just $3bn under management, suggesting it is now valued at more than 1bn. As part of the deal, BlueCrest was given 50m to hire top talent from rival firms and investment banks.

BlueCrest trades from Enron's former UK headquarters in Belgravia, West London.

To see more of The Business, or to subscribe to the newspaper, go to http://www.thebusinessonline.com.

Copyright (c) 2007, The Business, London
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