Michael Edward Platt: A British Billionaire Hedge Fund Manager
Journey of Michael Edward Platt:
Michael Edward Platt, born on March 18, 1968, is a British
hedge fund manager who has amassed considerable wealth. He's the co-founder and
managing director of BlueCrest Capital Management, which he helped establish in
2000. BlueCrest Capital Management is ranked as Europe's third-largest hedge
fund firm.
Michael
Platt's success in the hedge fund industry has made him one of Britain's
wealthiest individuals. According to the Forbes Real Time Billionaires List,
Platt holds the title of Britain's richest hedge fund manager, boasting an
estimated wealth of $15.2 billion.
Early Life and Introduction to Investing
Michael Platt was born in Preston, Lancashire, England, in
1968. His father was a civil engineering professor at the University of
Manchester, while his mother worked as a university administrator. Platt's
grandmother played a pivotal role in his introduction to the world of
investments. She was described as "a serious equity trader" and
guided Platt in purchasing stocks in trust savings banks when they went public.
At the young age of 14, Platt invested £500 in a shipping company called Common
Brothers, which quickly tripled in value. His initial foray into investing
began with Britain's newly privatized utilities.
Academic Journey: From Civil Engineering to Economics
Platt pursued his higher education at Imperial College
London, initially studying civil engineering. However, after a year, he
transitioned to mathematics and economics at the London School of Economics. In
1991, he graduated from the London School of Economics with a degree in
mathematics and economics, marking the beginning of his journey into the world
of finance.
Michael Platt's Journey with BlueCrest Capital Management
Michael Platt's career in finance began after his
grandmother introduced him to investing, recognizing his talent in the field.
He joined JP Morgan in 1991, where he played a pivotal role in developing the
swaps and options trading business. By 2000, Platt co-founded BlueCrest Capital
Management LLP alongside William Reeves.
BlueCrest's Strategy and Successes
In 2007, Platt's foresight led BlueCrest to avoid significant
losses during the financial crisis by selling bank shares and investing in
safer sovereign bonds. By 2014, BlueCrest had become Europe's fourth-largest
hedge fund, managing over £30 billion and employing 350 individuals. Initially
focusing on interest rate trading, BlueCrest expanded its operations to include
equity trading in 2013, competing with other major firms like Millennium
Management LLC and SAC Capital Advisors LLP.
Key Decisions and Challenges
In 2011, George Soros approached Platt, offering him over $1
billion to manage, but Platt declined, preferring to stick with BlueCrest's
standard fee structure. Platt also voiced concerns about the Eurozone crisis,
attributing it to cultural and political divides within the region. Despite
challenges, BlueCrest continued to make strategic investments, such as putting
$50 million into Meredith Whitney's hedge fund, Kenbelle Capital, in 2013.
Transition to a Private Partnership
In December 2015, Platt announced BlueCrest's decision to
return $7 billion to outside investors, becoming a private partnership and
halting the acceptance of external funds. Platt cited industry changes,
including fee pressures and difficulties in tailoring investment products, as
reasons for the transition. Despite this shift, BlueCrest's performance
remained strong, with profits of nearly 50% in 2016 and a 54% gain in 2017.
Continued Success and Wealth Accumulation
Platt's leadership propelled BlueCrest to impressive
returns, contrasting with the mediocre performance of some larger hedge funds.
In 2018, he was recognized as the richest hedge fund manager in the City by the
Sunday Times, with a net worth increase of 25% during the year. Forbes also listed
him among the highest-earning hedge fund managers and traders in March 2019. In
2019, BlueCrest's trading operation returned 53.5% net after expenses, earning
Platt approximately $2 billion. The following year, BlueCrest posted a 95%
gain, further swelling Platt's net worth to $10 billion. By 2023, his net worth
was estimated at £11.50 billion according to the Sunday Times Rich List.
Journey of Michael Edward Platt: A British Billionaire Hedge Fund Manager
Platt's Investment Approach
In July 2017, Platt's investment strategy at BlueCrest
involved dividing assets between systematic strategies driven by computer
algorithms and discretionary trades managed by humans. Systematic trades mostly
relied on trend-following strategies, buying assets on the rise and selling
those on the decline. While he delegates day-to-day management to traders,
Platt maintains overall control and implements aggressive stop-loss measures,
cutting allocations if traders lose even a small percentage of their capital. During
his first live television interview in December 2011, Platt outlined three
areas he avoids in his investments: exposure to banks, peripheral debt risk,
and illiquid investments. These strategic choices reflect his cautious approach
to risk management.
Criteria for Hiring Talented Traders
Platt emphasizes the importance of finding talented traders
who understand the market's nuances. He looks for individuals who possess a
keen sense of opportunity, such as those who demonstrate dedication by engaging
in activities like online poker to exploit potential trading advantages.
Additionally, he values traders who prioritize risk management, displaying
traits like paranoia that prompt them to hedge winning trades and effectively
manage losing positions. Moreover, Platt seeks traders who acknowledge when
they are wrong, emphasizing the importance of humility and adaptability in
navigating the dynamic financial landscape.
Relocation for Strategic Reasons
In 2010, Platt made a significant move from London to
Geneva, Switzerland, citing reasons such as evading increased regulation and
seeking better staffing options for his hedge fund, BlueCrest Capital
Management. Subsequently, in 2014, reports indicated that he had shifted his
base to Jersey, along with his hedge fund, transitioning from nearby Guernsey
for tax-related considerations.
Passion for Art Collection
Platt is renowned for his passion for art collecting,
particularly contemporary art. Rather than traditional art acquisition methods,
he has built his collection by commissioning pieces from well-known artists.
Platt maintains a private showroom in the crypt of a deconsecrated church at
One Marylebone, where he displays artworks by notable artists such as
taxidermist Polly Morgan, Turner Prize-winning sculptor Keith Tyson, and
charcoal artist Reece Jones.
Cameo Appearance in Popular Culture
Platt made a cameo appearance as himself on Showtime's
acclaimed series "Billions" in the first episode of Season 3,
showcasing his presence beyond the finance world and into popular culture.
Philanthropy and Impact:
Beyond his
achievements in finance, Platt is also known for his philanthropic endeavors.
He has been actively involved in charitable initiatives, particularly in the
fields of education and healthcare, making a positive impact on society beyond
the financial realm. Overall, Michael Platt's journey with BlueCrest Capital
Management leaves a legacy of excellence, innovation, and impact on the hedge
fund industry. His ability to generate consistent returns, embrace
technological advancements, and navigate market dynamics has solidified his
reputation as one of the most influential figures in finance.
