In this article, we discuss the billionaire Michael Platt’s stunning performance in 2021 and his top 10 stock picks. If you want to skip our detailed analysis of these stocks, go directly to Billionaire Michael Platt’s Stunning Performance in 2021 and His Top 5 Stock Picks.
Few hedge fund managers have a background in art, science, and philosophy. Investing is more closely related to subjects like mathematics and economics. However, for the two of the most successful investors on Wall Street over the past few years, William Reeves and Michael Platt, the co-founders of BlueCrest Capital Management, the former is true. They founded the hedge fund in 2000 and turned it into one of the most formidable in the finance world, managing close to $35 billion in assets at one point, before turning it into a family office in 2015.
Platt Breaks Records as 2021 Returns Top 30%
Platt, the co-founder of BlueCrest Capital Management, returned around $7 billion to investors in 2015 as BlueCrest turned attention towards managing the investments of Platt and his partners. The change — before 2015, the fund had operated on a multi-strategy, using several trades to invest across asset classes — proved to be one of the most successful decisions of his career. This is evidenced by the fact that in 2016, just a few months after the fund turned into a private partnership, Platt was worth $1 billion. In late 2021, this figure stood at near $13 billion.
Since 2016, the annual returns that BlueCrest Capital Management has posted are among the best on Wall Street. In 2021, Platt continued to exceed expectations, returning close to 30% on his investments. Although modest by recent standards — BlueCrest Capital Management posted returns of 50%, 54%, 25%, 50%, 95% in 2016, 2017, 2018, 2019, and 2020 respectively — the performance, coming in the midst of a volatile year for the market overall and a dramatic drop in the valuation of growth stocks, is nothing short of remarkable.
One of the reasons Platt has been so successful is that since closing down for third party investors, BlueCrest Capital Management has made aggressive bets on riskier equities. The fund, which generated $22 billion in trading profits between 2000 and 2015, looks set for an even better 2022 as some of the top stocks in the portfolio include Tesla, Inc. (NASDAQ:TSLA), Danaher Corporation (NYSE:DHR), and McAfee Corp. (NASDAQ:MCFE), among others discussed in detail below.
Our Methodology
The companies listed below were picked from the investment portfolio of BlueCrest Capital Management at the end of the third quarter of 2021. The stocks have been sorted based on the gains in their share price over 2021. The share price of each company, as January 1, 2021 and December 31, 2021, was used to calculate the percentage gain in value. The exact gains are mentioned alongside other details about the firms for further clarity.
Data from around 900 elite hedge funds tracked by Insider Monkey was used to identify the number of hedge funds that hold stakes in each firm.
Billionaire Michael Platt’s Stunning Performance in 2021 and His Top Stock Picks
10. PennyMac Financial Services, Inc. (NYSE:PFSI)
Number of Hedge Fund Holders: 33
Gain in Share Price in 2021: 12%
PennyMac Financial Services, Inc. (NYSE:PFSI) provides mortgage banking and investment management services. Platt invested in the company in the second quarter of 2021, buying over 318,000 shares at an average price of $60.76 per share. He then nearly doubled that stake during the third quarter. His fund, at the end of September, owned 610,611 shares of PennyMac Financial Services, Inc. (NYSE:PFSI) worth more than $37 million, representing around 1% of the entire portfolio.
A number of major hedge funds have also recently turned bullish on PennyMac Financial Services, Inc. (NYSE:PFSI). Among the hedge funds being tracked by Insider Monkey, Boston-based investment firm MFN Partners is a leading shareholder in PennyMac Financial Services, Inc. (NYSE:PFSI) with 3.5 million shares worth more than $215 million.
Just like Tesla, Inc. (NASDAQ:TSLA), Danaher Corporation (NYSE:DHR), and McAfee Corp. (NASDAQ:MCFE), PennyMac Financial Services, Inc. (NYSE:PFSI) is one of the stocks on the radar of elite investors.
9. Essential Utilities, Inc. (NYSE:WTRG)
Number of Hedge Fund Holders: 19
Gain in Share Price in 2021: 15%
Essential Utilities, Inc. (NYSE:WTRG), which operates as a regulated utilities provider, has attracted a lot of interest from institutional investors in the past year. At the end of the third quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $435 million in Essential Utilities, Inc. (NYSE:WTRG), up from 13 in the preceding quarter worth $272 million.
Platt has been bullish on Essential Utilities, Inc. (NYSE:WTRG) for close to two years now. He first opened a position in Essential Utilities, Inc. (NYSE:WTRG) during the first quarter of 2020, buying nearly 14,000 shares at an average price of $47.18. Since then, he has added to that stake handsomely. His fund now owns 241,530 shares of Essential Utilities, Inc. (NYSE:WTRG) worth $13.8 million, representing 0.37% of the portfolio.
8. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 45
Gain in Share Price in 2021: 17%
Altria Group, Inc. (NYSE:MO) has benefited from the market shift towards value stocks in the past few months. Platt has also turned bullish on Altria Group, Inc. (NYSE:MO) recently. BlueCrest Capital Management, at the end of September, owned 132,000 shares of Altria Group, Inc. (NYSE:MO) worth nearly $6 million, representing 0.16% of the portfolio.
Altria Group, Inc. (NYSE:MO) markets tobacco products. Several other elite hedge funds also hold large stakes in Altria Group, Inc. (NYSE:MO). At the end of the third quarter of 2021, 45 hedge funds in the database of Insider Monkey held stakes worth $829 million in Altria Group, Inc. (NYSE:MO).
Like Tesla, Inc. (NASDAQ:TSLA), Danaher Corporation (NYSE:DHR), and McAfee Corp. (NASDAQ:MCFE), Altria Group, Inc. (NYSE:MO) is a notable stock pick of BlueCrest.
In its Q2 2021 investor letter, Broyhill Asset Management, an asset management firm, highlighted a few stocks and Altria Group, Inc. (NYSE:MO) was one of them. Here is what the fund said:
“Altria Group, Inc. (NYSE:MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.
MO Valuation. Altria Group, Inc. (NYSE:MO) is up ~ 18% YTD (even accounting for the recent sell-off). We expect Altria Group, Inc. (NYSE:MO) to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). Altria Group, Inc. (NYSE:MO) stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”
7. NiSource Inc. (NYSE:NI)
Number of Hedge Fund Holders: 24
Gain in Share Price in 2021: 22%
NiSource Inc. (NYSE:NI) is a natural gas and electric utility firm. Major hedge funds have been piling into the stock over the past few months. Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in NiSource Inc. (NYSE:NI) with 5.3 million shares worth more than $128 million.
Platt first purchased a stake in the firm in the fourth quarter of 2013. He then added to the position steadily until late 2015. In the second quarter of 2016, he sold this stake completely before opening a new position in the third quarter. This stake was sold off too. In 2018, he bought some shares of NiSource Inc. (NYSE:NI) before selling them off again. The hedge fund led by Platt presently owns 241,742 shares of NiSource Inc. (NYSE:NI) worth $5.8 million, representing 0.15% of the portfolio.
6. CME Group Inc. (NASDAQ:CME)
Number of Hedge Fund Holders: 64
Gain in Share Price in 2021: 27%
CME Group Inc. (NASDAQ:CME) owns and runs a derivatives marketplace. Platt has been a long-term admirer of the stock and it has featured in the BlueCrest Capital Management portfolio, with minor breaks, since the fourth quarter of 2010. At the end of September, the fund owned 28,750 shares of CME Group Inc. (NASDAQ:CME) worth $5.5 million, representing 0.14% of the portfolio.
Along with Platt, other elite hedge fund managers also like CME Group Inc. (NASDAQ:CME). At the end of the third quarter of 2021, 64 hedge funds in the database of Insider Monkey held stakes worth $2.68 billion in CME Group Inc. (NASDAQ:CME), up from 62 the preceding quarter worth $2.64 billion.
In addition to Tesla, Inc. (NASDAQ:TSLA), Danaher Corporation (NYSE:DHR), and McAfee Corp. (NASDAQ:MCFE), CME Group Inc. (NASDAQ:CME) is one of the stocks that hedge funds are buying.
In its Q1 2021 investor letter, Cooper Investors, an asset management firm, highlighted a few stocks and CME Group Inc. (NASDAQ:CME) was one of them. Here is what the fund said:
“CME Group Inc. (NASDAQ:CME) has been owned by the portfolio for five years. CME’s strategic positioning as a monopolistic global financial exchange operator will continue to afford the business a highly attractive margin profile. CME Group Inc. (NASDAQ:CME) is well managed however we can no longer identify clear value latency opportunities for the management team to execute against and so decided to exit our position.”
To see rest of the stocks click to read Billionaire Michael Platt’s Top 5 Stock Picks.
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Disclosure. None. Billionaire Michael Platt’s Stunning Performance in 2021 and His Top 10 Stock Picks is originally published on Insider Monkey.
