Michael Edward Platt (born 18 March 1968) is a British billionaire hedge fund manager. He is the co-founder and managing director of BlueCrest Capital Management, Europe's third-largest hedge-fund firm which he co-founded in 2000. He is Britain's wealthiest hedge fund manager according to the Forbes Real Time Billionaires List, with an estimated wealth of US$15.2 billion.
Early life and education
Platt was born in Preston, Lancashire, England in 1968. His father taught civil engineering at the University of Manchester. His mother was a university administrator. His grandmother, whom he has described as "a serious equity trader," introduced him to investment. She "helped him buy stock in trust savings banks that were selling shares to the public." At 14, he invested £500 in a shipping line, Common Brothers, that soon tripled in price. Some of his first investments were in Britain's newly privatised utilities.
He studied civil engineering at Imperial College London, but after a year, switched to mathematics and economics at the London School of Economics, from which he graduated in 1991.
Investment career
Early career
Platt started in the after his grandmother gave him some shares in which to invest and he discovered he had a talent for investing.
He joined JP Morgan in 1991. Platt assumed responsibility for developing JP Morgan's swaps and options trading business in April 1992, and in April 1996, became the head of trading for all swaps products relating to the 11 founding states of the European single currency, the euro. In 2000 Platt co-founded BlueCrest Capital Management LLP, with William Reeves.
BlueCrest Capital
Discerning in August 2007 that "a stock market crash lay ahead," Platt "sold his bank shares, and bought ‘safe’ sovereign bonds," and thus "avoided the worst of the financial crisis, and profited from the resulting 'flight to quality' and plunge in interest rates."
As of 2014, BlueCrest was Europe's fourth largest hedge fund. In that year, it managed over £30 billion and employed 350 people. BlueCrest initially focused on trading interest rates and using computer algorithms to capture trends in bonds and commodities. In 2013 it expanded into trading equity to compete with Millennium Management LLC and SAC Capital Advisors LLP.
In 2011, George Soros decided to stop managing money for outside clients and turn his hedge-fund firm into a family office. Soros spoke to Platt, asking him to take on more than $1 billion for a 0.5 percent management fee and a 10 percent performance fee. Platt reportedly declined the offer, saying plenty of investors were willing to pay BlueCrest 2-and-20, the industry standard fee structure.
That same year, Platt discussed the crisis in the Eurozone, attributing it to "the cultural and political divide" between north and south. "The reality is that there is no willingness within the Eurozone to share wealth," he said. "In the United States, if California is having a really difficult time, the rest of the United States will send money to California. This is not the case in Europe." He further maintained that Europe's problem was that "almost every part of it has gone wrong now. The banks are undercapitalized…If banks were hedge funds, and you mark them to market properly, I would say that probably most of them are insolvent." By contrast, he was relatively positive about the U.S. and Germany.
In 2013, BlueCrest invested $50 million in Meredith Whitney's hedge fund, Kenbelle Capital. In October of that year, BlueCrest made a redemption request, but while Kenbelle said it would comply, no repayment was forthcoming. The next year, BlueCrest sued in Bermuda to get its money back from the firm. In 2015, Whitney closed up shop and paid back all her investors, including BlueCrest.
In December 2015, Platt announced that BlueCrest would return $7 billion for outside investors, take no outside money in the future, and become a private partnership. In his letter to investors explaining the change, Platt explained that "Recent developments in the industry, including, among other things, downward pressure on fee levels, the increasing cost of hiring the best portfolio management talent and the difficulty in tailoring investment products to meet the individual needs and constraints of a large number of diverse investors, have all significantly reduced industry profitability and flexibility." Consequently "BlueCrest believes that a transition to a Private Investment Partnership model is now appropriate for the business."