BlueCrest -- best HF??

Returns speak for themselves -- here are the past 6 yrs for BlueCrest: 50% (2016), 54% (2017), 25% (2018), 50% (2019), 95% (2020), 30% (2021). Platt is a brilliant dude. Those numbers are absurd for any fund > 10bn. I know they're a macro fund, but do they also have a l/s book? Anyone have any info on comp and culture? Thanks

Comments (15)

Jan 19, 2022 - 1:56pm
rumplestiltskin, what's your opinion? Comment below:

Maybe someone can explain how they underperformed all of their peers when they were public, turn into family office, and now beat everyone else in their class by miles all while having worse terms than the MMs.

I don't know anyone good that has went there in the past 3-4 years.

  • PM in HF - RelVal
Jan 19, 2022 - 3:06pm

How much worse were the terms than the standard 20% payout? I've seen a bunch of Citadel GFI guys pop up at BC

Jan 19, 2022 - 4:18pm
rumplestiltskin, what's your opinion? Comment below:

Comparing GFI to BC, BC will give a higher payout but books are much smaller and sharpe required is much higher.  GFI certainly doesn't pay 20% net.

I do think BC is good if u have some niche thing that is very capacity constrained and high sharpe but want max payout and no aspirations beyond that.

One downside I have heard is that BC has a back book to replicate your trades

Jan 19, 2022 - 2:01pm
rumplestiltskin, what's your opinion? Comment below:

On comp and culture, my understanding is that they defer your compensation over 3 years, so if you leave or quit, you never actually get paid for the next 2 years.  This is a deal breaker compared to the other funds.  I don't know why anyone would go here and yet they claim to be trouncing everyone else by leaking their own results to the media.  They don't have investors so there is no reason these numbers need to be honest.  Please explain someone

  • Associate 2 in PE - Growth
Jan 19, 2022 - 2:03pm

how is it a deal breaker? if a $12bn fund is up 30% and your a relatively senior analyst, you could be looking at 50-100bps of carry pool - thats like $3-7mm…i would stay at blue crest to get that pay out. triple the number for their 95% yeae…

Jan 19, 2022 - 2:35pm
rumplestiltskin, what's your opinion? Comment below:

Because Platt does all the math and holds all the options.  I just don't believe that he didn't run all the numbers and is just giving people that upside over other funds for free, do you?

Jan 19, 2022 - 2:38pm
rumplestiltskin, what's your opinion? Comment below:

Actually, I can't work out the math on this either, how do you get to 3-7mm?  It seems you are assuming an incentive fee that doesn't exist because it's all his money.  Really what you would be doing is investing part of your previous bonus into some share class of the internal fund.  So to get the 3mm, you would need to have 10mm already deferred taking this at face value, which I certainly don't as the payout it implies is not real.

10mm in fund means u make about 5mm/year in comp, so 2 years have been deferred.  Then you make 3mm a year off carry and 5mm a year off incentive.  That implies that your effective payout is ~35%?  I mean, maybe, but why would the most calculating individual do this if you aren't selling options somewhere?

Most Helpful
Jan 19, 2022 - 4:26pm
rumplestiltskin, what's your opinion? Comment below:

OK, I might as well say what I suspect is going on that allows them to outperform direct competitors like this when their public returns were nothing like this.  I have no personal info, so am just loosely hypothesizing.

They are taking some risks via leverage that no sane investor would let them take, hence juiced returns and private structure.  Somehow the fund is structured to have limited recourse to Platt personally, he is able to take out his profits first (yearly), and they are basically short a bunch of out of money options somewhere in terms of how much leverage they have.  

So why does Platt allow this structure to exist and who is ultimately left holding the bag with bottom tranche equity?  The employees who have to put deferred comp into the fund.  Nothing is free and they are not THAT much better than everyone else consistently, which would imply they are taking risks others are not allowed to.  Can anyone confirm or deny this?

Jan 21, 2022 - 10:02pm
tardfi, what's your opinion? Comment below:

they're not a hedge fund anymore, in the legal sense. they changed a lot of their super tight drawdown and risk mgmt metrics since they gave back investor money. 

I know the exact comp number for the standard PM and it is equal highest for macro funds as far as I'm aware (between 20 and 25% of PnL, as of Sep 2021). However, they've become a little top heavy and fired quite a few PMs in the June and Nov/Dec rates moves, even those who were performing well, since Michael and his head of trading  (forgot his name, but met him a few times, he works in the Miami office) wanted to retain a few of the long timers who lost money - this never would have happened when they were still hedge fund. 

anyway, when I was a bank this was for sure the top 5 places traders wanted to go, and definitely somewhere I wanted to work (mostly for comp and flexibility).

im not aware of l/s book, but wouldn't be surprised as I was told by a friend who's there that they've become very multi-strat x-asset.

  • Analyst 3+ in HF - EquityHedge
Jan 22, 2022 - 12:44am

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