Croydon Pension Fund will double its investment with BlueCrest Capital Management LLP, the hedge-fund firm started by Michael Platt, after the British municipal pension plan pulled its money from Fauchier Partners LLP.
The program will put 14 million pounds ($22 million) with BlueCrest after terminating its investment with Fauchier because of poor returns, Nigel Cook, Croydon’s head of pensions and treasury management, said by telephone.
“Performance was the key factor,” Cook said of the decision. “It was disappointing, and board members felt that they were looking for something more from Fauchier.” He wouldn’t give details of Fauchier’s returns, citing a confidentiality agreement with the fund manager.
Croydon put 14 million pounds in BlueCrest’s AllBlue Fund (BABS), which invests in other BlueCrest hedge funds, in December 2009. At the same time, it invested a similar sum in Fauchier’s Jubilee Absolute Return Fund, a fund of hedge funds.
The pension provider is yet to decide whether to add to its existing holding in AllBlue or invest in another fund managed by BlueCrest, Cook said. Croydon has no plans to expand its hedge-fund investments beyond the current amount, Cook said.
Permal Group, a unit of Legg Mason Inc. (LM:US), acquired Fauchier Partners in March. Cook said that takeover wasn’t a factor in the decision. Alastair Crabbe, a spokesman for Permal, and Ed Orlebar, a spokesman for BlueCrest, both declined to comment.
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