Hedge Fund Market Wizards

Chapter 8

Michael Platt

The Art and Science of Risk Control

Michael Platt achieved career clarity at an early age. “I have had a very easy life,” he says, “because I never had to think about what I wanted to do. I wanted to be a trader from when I was 12, and I started when I was 13.” Platt continued to successfully trade stocks through high school and university with one major exception: His stock account lost half its value in a single day—the crash of October 19, 1987. This episode was the first and last time Platt experienced a large percentage loss.

After graduating from the London School of Economics in 1991, Platt joined JP Morgan where he had an extremely profitable eight-year career, trading a wide range of fixed income derivatives. His success at the firm led to repeated promotions, culminating with his appointment as managing director in London with the responsibility of heading up proprietary relative value trading. Platt left JP Morgan in 2000, along with William Reeves, to co-found BlueCrest. The firm has been extremely successful, growing to close to $29 billion in assets under management and nearly 400 staff by early 2012. The majority of assets are in two programs: a discretionary strategy headed by Michael Platt, and a systematic trend-following strategy headed by Leda Braga, who joined the firm in 2001.

The discretionary trading strategy has achieved an average annual compounded net return of just under 14 percent.1 The hallmark of BlueCrest’s performance is ...