BlueCrest Said to Raise Performance Pay for Some Traders

  • Payments to some traders increased to 18% of profits generated
  • BlueCrest hires managers Aron in New York, Yiasoumi in London

Billionaire Michael Platt’s BlueCrest Capital Management, which is returning all outside money to investors, raised the percentage of profits that its money managers can earn in its effort to hire and retain top traders, a person with knowledge of the matter said.

The traders will now keep 18 percent of profits they make, up from 16.5 percent, the person said, asking not to be named because the information is private. The person wasn’t aware if all of the money managers at BlueCrest are now getting the same pay rate.

"Our strategy is to grow our business and we are fully committed to hiring the best talent available," said BlueCrest spokesman Ed Orlebar. He declined to comment on the changes to pay.

The decision comes after BlueCrest said in December it would return external capital to focus on managing Platt’s wealth and that of his partners, giving the firm more flexibility to reward employees. The firm expects strong growth in the number of trading teams and assets under management, it said at the time.

Outside investors account for about $7 billion of the firm’s $8 billion assets, the firm said in December. BlueCrest also has a separate internal fund for partners that managed about $1.5 billion in 2014, according to pension consultant Albourne Partners Ltd.

BlueCrest, which generated trading profits of more than $22 billion during 15 years of managing money for external investors, will return 75 percent of client cash before the end of January and 90 percent by the end of the first quarter of 2016, the firm said last month.

Talent Pool

Hedge funds typically charge 2 percent of the assets they hold as a management fee and take a 20 percent cut from returns they generate. Industry assets have risen by about $1 trillion in the last five years to almost $3 trillion, even as banks shut their proprietary trading units, the traditional training ground for hedge fund money managers.

BlueCrest has lost some money managers since Platt’s December announcement, including London-based Joshua Farber and Jihan Bowes-Little, according to people familiar with the matter and records of the U.K.’s Financial Conduct Authority.

In January, it hired Adam Aron, a former senior energy analyst at Citadel’s Surveyor Capital unit, as a portfolio manager within its equities team in New York. Panos Yiasoumi, former co-head of European government bonds in global rates and currencies at Bank of America Corp., has also joined as a money manager in London. Orlebar confirmed both hires.

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