William Reeves and Michael Platt founded alternative asset management company BlueCrest Capital Management LP in 2000. Prior to founding their own fund, both men were managing directors and senior proprietary traders at JP Morgan & Co. Mr. Platt got hooked on investing at a very young age thanks to his grandmother, who was an equity trader. When he was 14 years old, he invested £500 in British shipping line Common Brothers and got back three-times that amount. He holds a Bachelor of Arts/Science from London School of Economics, while his fund’s co-founder William Reeves has a Bachelor’s degree in English from Yale University and an MA in Philosophy from New York University.
Their London-based fund, BlueCrest Capital Management has expanded greatly in the nearly two decades since its founding, opening offices in New York City, Boston, Geneva, and Singapore. Since its inception, Blue Crest Capital Management LP has gone through several corporate changes. In 2008 the fund became BlueCrest Capital Management LLP, which was succeeded in 2014 by BlueCrest Capital Management Limited. Those corporate changes had no effect on the way the fund conducted its business, but in December 2015 a more noteworthy structural change happened, as the fund became a private investment partnership, returning all capital to third party investors.
That shift ended up being the best move BlueCrest Capital Management ever made, despite a storied history up to that point that included it holding around $35 billion in assets under management at one point. After turning the fund into a family office, it has generated eye-popping net returns of 50% in 2016 and 54% in 2017.
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The idea to make such a drastic change of the fund’s structure came out of a desire to avoid further stress caused by the pressure of fees coming from investors and rising costs, but also because Mr. Platt wanted to compete more effectively. “We will be stronger and more flexible under our new business model, and see exciting opportunities to grow significantly in terms of numbers of trading teams and assets under management,” he said.
According to its plain brochure, the fund had $3.55 billion in assets under management on June 30, 2017. At the end of the second quarter of 2018, the fund’s 13F portfolio was valued at $3.86 billion. On the next page, we’ll take a look at some of its holdings and latest portfolio moves.
In the second quarter of 2018, BlueCrest Capital made many changes to its extensive equity portfolio, with around 1440 holdings at the end of the quarter. During the quarter, the fund added around 690 new positions to its portfolio, while dumping nearly an equal amount. Some of the largest new positions the fund acquired during that period include Pepsico Inc (PEP), as the fund obtained 225,960 shares worth around $27.87 million, and Royal Dutch Shell Plc (RDS), in which the fund attained a position valued at $18.3 million and counting 264,286 shares.
Though Royal Dutch Shell Plc (RDS) enjoyed an increase in the number of bullish investors from Insider Monkey’s database during the second quarter, to 39 at the end of June from 36 at the end of March, it remains a stock that is less popular among the smart money than other companies with similar market caps, which tends to be the case with most large oil companies.
The next in line among the fund’s large new acquisitions is Union Pacific Corp (UNP), in which the fund established a position worth $18.12 million as of the end of Q2 and counting 127,883 shares. Among the biggest positions the fund said goodbye to were two companies that were recently acquired: Monsanto Co. and TimeWarner Inc.
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