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"I'm The Highest Earning Person In Finance...In The World"
From the infamous YouTube video to his smart trade ideas, we detail the career of Michael Platt.
We continue our investor series with a hedge fund manager close to home here in London. Today in focus is Michael Platt, in a tale of rags to riches…
Who is Michael Platt?
Platt was born into a modest family in 1968 in Preston, UK. From a young age, his curiosity and fascination with finance became evident.
Growing up in a middle-class household, he was not born with a silver spoon but possessed a remarkable aptitude for numbers and a tireless work ethic.
He was introduced to investing by his grandmother who taught him how to buy shares. At age 14, he bought £500 worth of a shipping line stock, which then tripled in value.
Platt pursued higher education in mathematics and economics, ultimately attending the London School of Economics. It was during these formative years that he laid the foundation for his future success in the world of finance.
He joined JP Morgan in 1991 as an Options trader and excelled in this role, quickly moving through the ranks. In 2000 he quit to start up his own hedge fund, BlueCrest Capital Management LLP.
Investment strategy and top trades
Blue Crest used (and still uses) a mix of computer driven algorithms to buy and sell assets, as well as using human driven picks (i.e Platt’s own ideas).
He primarily trades interest rates and equities, but as an unconstrained fund he has the ability to do what he wants within reason.
The computer driven ideas are focused on trend following investing. This means the algo’s will buy assets that are rising in value and sell those that are falling. Trend investing in reality is more complicated that that last sentence, but you get the idea!
As for his own ideas, Platt and his traders implement their own macro view into specific ideas. For example, one of his best trades came in 2022, when he decided early in the year to short US and UK Government bonds. This was on the premise that central banks would aggressively hike interest rates, pushing up the yields on such bonds and causing the prices to fall.
This paid off in spectacular fashion, with yields spiking. Below we flag up the move higher in the US 2yr bond yield over the course of 2022:
He made a return of 153% for the year, with a large part of that down to his sizeable bet on the bond market.
Fund performance and wealth generation
Platt started out in growing his wealth in a conventional way through his hedge fund. It charged a operating percentage of assets under management as well as a performance fee based on the returns above a benchmark.
This did well over the years, with Platt generating an average of a 14% return from 2000 to 2012. This grew assets under management to $35bn in 2013, making it the fourth biggest fund in Europe.
After a couple of average years, he decided to give investors their money back in 2015 and turn the fund into a family office, managing just his own wealth. This structure change also meant less scrutiny from regulators and more freedom to take on leverage on his investments.
Since 2015, Platt has turned both his investment vehicle and his personal wealth north of $10bn following some incredible returns:
THAT YouTube Video
Platt was known in the finance industry thanks to his strong investment returns. However, he gained more mainstream traction three years ago after a video surfaced online of him in the back of a taxi.
When asked about his profession, Platt smiles and comments that he’s the highest earning person in the world in finance. It’s a short clip but you can watch it yourself with the below link:
Was Platt’s statement true? From our calculations the answer is a no, but we’re splitting hairs on relative numbers here. What is true is that he’s a top 10 fund manager of his generation, all done from humble beginnings.
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