Albourne Partners has called into question an internal fund of hedge funds at BlueCrest Capital Management.
The hedge fund consultant said BSMA, or BlueCrest Staff Managed Account, could pose a conflict of interest for the hedge fund. The fund manages part of BlueCrest employees' deferred compensation and has US$1.5 billion in assets.
Albourne said it became aware of the fund only this month, and warned in a report on BlueCrest's flagship International Fund that its existence could pit management interests against those of investors. Albourne's concerns were first reported by Bloomberg News.
"We also do not feel that BlueCrest has provided appropriate disclosure to Albourne or to external investors, as far as we are aware," Albourne analyst Jane Hughes wrote. "Nor have they been sufficiently open with Albourne when we have tried to discuss the possible conflicts."
BlueCrest said the fund has been in place for years and is used to retain talent. The hedge fund said that it has procedures in place to prevent conflicts of interest.
BSMA, formerly known as the Bluestar Master Fund, invests both in BlueCrest's strategies and external funds, CFO Andrew Dodd told Bloomberg. BlueCrest's senior partners are required to invest in the fund, and employees have more money in BlueCrest funds that manage outside money.
"Staff at BlueCrest have more than $2 billion invested in our funds," he said. "We feel that makes our interests aligned."
Dodd said BlueCrest's anti-conflict rules apply to all of its hedge funds, including BSMA.