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Sept. 26 (Bloomberg) -- The departure of the second-biggest money manager from billionaire Michael Platt’s BlueCrest Capital Management LLP is the latest sign of upheaval for the $27.1 billion firm.

BlueCrest, which thrived after the 2008 financial crisis to grow into Europe’s third-biggest hedge-fund firm, said today that Leda Braga will leave to start her own business, taking almost a third of its assets. Braga, who oversaw computer-driven trading at London-based BlueCrest, said in an interview that she and Platt have been discussing a split “on and off” for some time.

“If I was an investor, this would raise organizational concerns and I would want to learn what the reasons for the split-up are,” said Don Steinbrugge, managing partner of investment adviser Agecroft Partners LLC.

BlueCrest, which former JPMorgan Chase & Co. trader Platt started in 2000, has seen assets fall by more than $10 billion in the past year. The firm been has hurt by underperformance, clients pulling money and the revelation that it ran a secret internal fund for employees that an influential industry consultant said may pose conflicts between BlueCrest and its investors.

BlueCrest has said the fund has existed for years to retain talent and the firm has procedures in place to protect against conflicts of interest.

Most Powerful

Braga, 48, who lectured at Imperial College London where she got a doctorate in mechanical engineering, is starting Systematic Investments. It will oversee $8.3 billion and be minority owned by BlueCrest. BlueTrend, the main hedge fund she manages at BlueCrest, saw assets plunge by half in the past year, suffered investment losses of 11.5 percent last year and had its management fee cut in August by 50 basis points to 1.5 percent. Braga said the split from BlueCrest will make managing risk easier, she said in the telephone interview.

Even with her recent struggles, Braga, a Brazilian, is the most powerful woman in the hedge-fund industry, as she manages more than twice as much money as her closest peer. She joined BlueCrest in 2001 to start its computer-driven strategies, which rely on mathematical models to decide when to buy and sell assets. She previously was a quantitative analyst at JPMorgan’s derivatives research group.

Following Braga’s departure, BlueCrest will focus on discretionary investing at its BlueCrest Capital International, or BCI, and AllBlue hedge funds, which oversee a combined $17.8 billion, the company said in an e-mailed statement.

BlueCrest Expanded

BlueCrest expanded with the help of investments from pension plans and endowments that were impressed by its performance during and after the financial crisis. Assets peaked at $37 billion in May 2013 -- a 158 percent increase from the end of 2008. The rapid growth enabled the firm to hire dozens of traders who were fleeing investment banks, because of new regulations and a decreased risk appetite on Wall Street.

BCI, the $10.3 billion fund personally managed by Platt, made money in 2008 when most hedge funds suffered losses and then surged 45 percent in 2009 when competitors were still hesitant to take on risk. BlueTrend jumped 43 percent in 2008 and then gained 4.4 percent in 2009, a year when many trend- following hedge funds failed to capture the reversal in markets from bearish to bullish.

BlueCrest hasn’t done well lately. The BCI fund, which primarily trades interest rates, is up 0.3 percent this year, after declining 1.6 percent in 2013. Hedge funds on average have risen 2.5 percent this year through August and gained 7.4 percent in 2013, according to data compiled by Bloomberg. Platt, 46, is worth at least $1.3 billion, according to the Bloomberg Billionaires Index.

Senior Partners

In February, Albourne Partners Ltd. told clients that it had discovered BlueCrest was running a $1.5 billion internal hedge fund that only senior partners invested in. Albourne said its existence raised concerns that BlueCrest’s interests weren’t aligned with investors and that the hedge-fund firm hadn’t been forthcoming enough when asked about the fund, people with knowledge of the matter said at the time.

Albourne’s clients, which include the Teacher Retirement System of Texas, have more than $350 billion invested in so- called alternative investments such as hedge funds, private equity and real estate. One investor that has hundreds of millions of dollars with BlueCrest considered the lax disclosure about the internal fund a violation of trust, said a person with direct knowledge of the matter who asked not to be identified because discussions with the firm are private.

BlueCrest also fired four U.S. money managers this week who invest in stocks, according to another person with knowledge of the matter. As part of the terminations, Jonathan Larkin, who oversaw U.S. stock trading for BlueCrest, resigned from the firm, said the person.

Make Changes

“We remain very focused on performance, and unfortunately we’ve had to make some changes in the U.S. business,” BlueCrest Chief Financial Officer Andrew Dodd said in an e-mailed statement. “Our overall strategy remains very firmly in place and we will continue to grow and build the fund.”

BlueCrest, which hired the traders following its expansion into equities last year, in July opened a Boston office and hired former Point72 Asset Management LP technology money managers Nina Hughes and Telis Bertsekas.

To contact the reporters on this story: Jesse Westbrook in London at jwestbrook1@bloomberg.net; Saijel Kishan in New York at skishan@bloomberg.net; Lindsay Fortado in London at lfortado@bloomberg.net To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net Peter Eichenbaum, Pierre Paulden

Bloomberg