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.”
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.