A hedge fund that was once one of the world's largest is now returning money to investors

BlueCrest Capital, the once-massive hedge fund led by Michael Platt, will immediately start to return all outside capital to investors, according to a letter.

The 15-year-old fund plans to operate as a private firm "focusing solely on the management of the assets of its partners and employees," the letter said.

At its peak in May 2013, BlueCrest was one of the world's largest funds, managing $37 billion in assets. It was last managing around $8 billion, according to Bloomberg News.

The fund has been hit with a slew of large redemptions from pensions and endowments in the last two years due to lackluster performance, according to an August report from the Financial Times' FundFire.

"Recent developments in the industry, including, among other things, downward pressure on fee levels, the increasing cost of hiring the best portfolio management talent and the difficulty in tailoring investment products to meet the individual needs and constraints of a large number of diverse investors, have all significantly reduced industry profitability and flexibility," Platt wrote in the letter.

"These factors have affected BlueCrest along with many other industry participants, and BlueCrest believes that a transition to a Private Investment Partnership model is now appropriate for the business."

Here's Platt's letter in full:

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