Michael Platt is the co-founder and managing director of BlueCrest Capital Management, Europe’s third-largest hedge-fund firm.
BlueCrest Capital Management is an alternative asset management business founded in 2000 and based in Jersey.
Michael Platt studied Civil Engineering at Imperial College London and after a year, he switched to Mathematics and Economics at the London School of Economics.
Platt started in the City after his grandmother gave him some shares to investors.
Michael Platt joined JP Morgan in 1991 where he was responsible for developing swaps and options.
In April 1996 he became the head of trading for all swaps products relating to the 11 founding nations of the European single currency. In 2000 Michael Platt co-founded BlueCrest Capital Management LLP, with William Reeves. The fund manages over £30bn and employs 350 people.
BlueCrest focused on trading interest rates and using computer algorithms to exploit trends in bonds and commodities.
In 2010, Michael Platt moved from London to Geneva, Switzerland, to reduce his tax burden and avoid increased regulation.
The following year, 2011, George Soros decided to stop managing money for outside clients and turned his hedge-fund firm into a family office. So Soros approached Michael Platt asking him to invest more than $1 billion for a 0.5 percent management fee and a 10 percent performance fee. But Platt reportedly declined the offer, saying plenty of investors were willing to pay BlueCrest 2-and-20 which is the industry standard fee structure.
In 2013 BlueCrest expanded into trading equity to compete with Millennium Management LLC and SAC Capital Advisors LLP.
In 2014, Platt relocated to Jersey, along with his hedge fund, which was moving from nearby Guernsey, for tax purposes.
In 2016 Michael Platt’s BlueCrest Capital Management announced that it would be returning the $7 billion it manages for outside investors and become a private partnership. In other words, Platt turns his hedge-fund firm into a family office where he manages his own money. “It is no longer a particularly profitable business to run a multi-manager hedge fund on 2 and 20% fees”.
Michael Platt told the Financial Times “Instead we are happy to be our own client and run our own amount of leverage”
Michael Platt is co-founder and managing director of BlueCrest Capital Management…
Platt has a net worth of 4.5 billion USD
Michael Platt makes money by finding an edge and leveraging it. He likes to trade aggressively following a crisis. “I think the major opportunities will come post the blow-up.” Platt adds, “The most important thing to remember about crises is you do not make your money going into the crisis. The big money you make in trading is more in the aftermath of the crisis. In 2009 we made 60% with no down months on our master fund.”
He also likes to keep it uncomplicated and highly liquid. “Keep it simple don’t take credit risk, crisis intensifies deficits becoming more unstable and growth deteriorating in particular. The strategy at BlueCrest is to be in super liquid products, things that can be turned around in a day.”
“I do not take any exposure to banks at all if I can avoid it,” he said
What about peripheral debt?
” I am not interested in taking any peripheral debt risk at all and we’re not interested in taking any bank credit risk right now,” said Platt
“I would not touch an illiquid product with a barge pole, to be honest,” he said.
In short, in troubling times Michael Platt steers away from credit, particularly risky credit.
In 2009 we made 60% with no down months on our master fund – Michael Platt
In a book entitled, Hedge Fund Market Wizard by Jack Schwager Platt (2012) Platt was asked what he looks for when hiring a trader.
“The type of guy I don’t want is an analyst who has never traded,” said Michael Platt.
He continued, “I want market makers, people who know that anything can happen. Market makers know that the market is always right. You are wrong if you are losing money for any reason at all.
I look for the type of guy in London who gets up at seven o’clock on Sunday morning when his kids are still in bed and logs onto a poker site so that he can pick off the US drunks coming home on Saturday night. I hired a guy like that… – someone who understands an edge”
The type of guy I don’t want is an analyst who has never traded – Michael Platt
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