BlueCrest to Return $8B, Become Family Office

BlueCrest Capital Management is returning $8 billion to investors and turning into a family office.

The hedge fund announced Tuesday it would no longer accept external money due to the challenge of meeting the individual needs of a large number of investors while still earning high returns. Trends in fee levels and the cost of talent, which also hurt the fund’s profitability, also contributed to the firm’s closing.

Going forward, BlueCrest will manage assets solely on behalf of its partners and employees. The firm said it expects the reduced number of funds will facilitate higher returns and greater profitability for stakeholders, and make it possible to compete aggressively for trading talent.

“We will be stronger and more flexible under our new business model,” said Michael Platt, founder and chief executive of BlueCrest. “We have delivered industry-leading returns to our investors over the past 15 years but believe that BlueCrest is now better suited to a private investment partnership model.”

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BlueCrest’s decision to transition into a family office follows a string of high profile hedge fund liquidations, including the closing of Fortress Investment Group’s flagship macro fund and Bain Capital’s absolute return fund.

BlueCrest said it expects to return 75% of client investment capital before the end of January and 90% by the end of the first quarter of 2016.

The hedge fund will retain its nine global offices and said it expects strong growth in employees and assets.

Seven UK public pensions have appointed Legal & General Investment Management (LGIM) to run £6.5 billion ($9.8 billion) in passive and smart beta mandates collectively.

“Joining forces has enabled us to unlock significant savings and gives clear and tangible evidence of what can be achieved.”The pensions for the counties of Cheshire, Leicestershire, Nottinghamshire, Shropshire, Staffordshire, Warwickshire, and Worcestershire have agreed to pool resources in line with wider plans set out by the UK government to run public pensions more efficiently.

A statement issued by consultant Bfinance, which advised on the agreement, claimed the collaboration would create fee savings of more than 50%. LGIM will manage passive equity, passive fixed income, and smart beta pooled funds for UK and global assets.

“Joining forces… has enabled us to unlock significant savings and gives clear and tangible evidence of what can be achieved if local government pension scheme funds are willing to work together and collaborate as equals,” said a spokesperson for the seven pensions.

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LGIM already runs roughly £3.9 billion in passive mandates for some of the pensions involved in the deal, the fund manager said in a statement. In total, the seven funds have more than £20 billion in assets.

This is the latest pooled project to be announced, following plans by Welsh pensions to combine their passive investments. LGIM currently manages such mandates for several public funds in Wales.

The London CIV—the collaborative venture backed by all 33 public pensions in the UK capital city—also this month announced its first funds.

Those deals come after the government set out its plans last week to dial back investment rules for local government funds, allowing them more flexibility to allocate and collaborate.

It also proposed “backstop” rules for pensions that did not participate in collaborative projects, which could include the Department for Communities and Local Government stepping in to take over responsibility for investment decisions.