BlueCrest Capital Management, one of Europe’s largest and fastest-growing hedge funds, is finding its retail investments didn’t pay off. The fund will be returning money to its clients, who will only get back 75 percent of their capital before the end of January.
A review of BlueCrest’s most recent 13F filing showed investments in Chinese market favorites, energy companies and many retailers. Huge stakes in PetroChina, down 34 percent year to date, and China Life Insurance, down 11 percent year to date, likely doomed the fund.
BlueCrest held 27 different retailers and half of those names had lost value in the double-digit range. Some of the biggest losers included 52,000 shares of Chico’s, which has fallen 26 percent year to date; 38,368 share stake in Urban Outfitters, whose valued has declined 36 percent yea to date, and a position of 32,500 shares of Men’s Wearhouse, which has dropped 53 percent this year.
BlueCrest’s founder and chief executive officer Michael Platt said, “Firstly, I would like to thank all of the investors who have entrusted money to the BlueCrest funds over the last 15 years and to wish them well in their future investment endeavors.”
At the end of September, things looked good for BlueCrest. According to the HFRI Equity Hedge Total Index, the fund had gains of 10 percent versus a 2.1 percent drop of its peers.
The fund blamed its decision to scale back on secular changes in the industry, trends in fee levels and the cost of hiring trading talent.
The hedge fund, which was founded in 2000, will going forward only manage money for the partners and employees. During its 15-year history, BlueCrest had delivered trading profits of over $22 billion for its investors, and had won numerous industry awards for excellence. Platt said, “We have delivered industry-leading returns to our investors over the past 15 years but believe that BlueCrest is now better suited to a Private Investment Partnership model.”
The positions will be sold in an orderly manner, according the company’s press release.
This is a list of the hedge fund’s top retail positions and their performance for the year:
Company Shares Held Performance YTD
Chico’s FAS Inc. 52,000 -26%
Urban Outfitters Inc. 38,368 -36%
Men’s Wearhouse 32,500 -53%
Finish Line Inc. 25,000 -36%
Tiffany & Co. 20,281 -25%
Sally Beauty Holdings Inc. 18,737 -16%
Stage Stores Inc. 16,864 -61%
Deckers Outdoors Corp. 15,000 -45%