Hedgefund News Wrap: Week Ending 12/04/2015

BLUECREST IS NOW BLUE IN THE FACE

(The New York Times) – BlueCrest Capital Management, the $8 billion fund run by Michael Platt, was once one of Europe’s largest hedge funds. But now it will return all client money and Platt will turn his attention to managing his own wealth and that of his partners and employees.

The firm has stated that outside investors, who account for about $7 billion of the firm’s assets, will get 75 percent of their money before the end of January and 90 percent by the end of the first quarter. Some may ask, why the sudden change? According to the firm, who will now become a private investment partnership, declining fees and rising costs are the main reason for the move.

bluecrest

“We like this new structure for us a lot more than the one we are leaving behind,” said Platt in an interview. “The investor base has become increasingly institutional and they want lower levels of risk and lower levels of fees.”

The firm peaked in 2012 when it oversaw around $36 billion, but now the risk-taking that was done in its early age is now increasingly limited by institutional investors’ demands for safer products. BlueCrest will now be part of the club of hedge funds that have decided to stop handling outside clients’ money.

Read the entire article at The New York Times
More coverage: The Wall Street Journal and Bloomberg

AVON GOING ONCE, GOING TWICE, (POSSIBLY) SOLD

(Fortune) – Avon Products, AVP, is in “advanced talks” to sell its long ailing North American business to a private equity firm in an effort to turn around sales numbers.

Cerberus Capital Management LP, a firm known for investing in distressed companies, would then become Avon’s largest shareholder and might get board seats, according to disclosed sources.

But not everyone is happy about the deal, in fact there is an activist investor group, led by Barington Capital, who is attempting to block the deal. Even though the iconic “Avon Ladies” are now bringing in half the amount of sales they did with the all-time high posted in 2007, the group is gung-ho with Avon remaining i-n-d-e-p-e-n-d-e-n-t and strong on its own.

Over the years competition from cosmetic-giants like Sephora and Ulta have taken over the the beauty regimen of women every where, but time will tell if Avon can be an “oldie, but a goodie.”

Read the entire article at Fortune
More coverage: The Wall Street Journal and The New York Times