Man Group's revival hinges on flagship fund

Wed Feb 27, 2013 1:37pm EST
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By Laurence Fletcher

LONDON (Reuters) - Man Group (EMG.L: Quote), trying to turn around the fortunes of its flagship fund AHL, will report its first set of results under new CEO Emmanuel Roman on Thursday.

Man, with $60 billion in assets, is trying to stem persistent client withdrawals and reverse the poor fund performance that has contributed to a fall in its share price by around two-thirds since the start of 2011.

Hopes of a rebound at Man have been triggered by the departure of CEO Peter Clarke and appointment of Roman, who takes over on Thursday. The change at the top plus more buoyant market sentiment have helped to drive a 42 percent rise in the shares since mid-November.

Roman was CEO of hedge fund GLG which Man bought in 2010 partly to try and diversify away from AHL.

The group may report a goodwill write-off in its results of between $500 million and $1 billion, according to RBC Capital Markets, primarily on GLG, which it bought for $1.6 billion.

Roman has already made some changes, promoting Sandy Rattray, head of the Systematic Strategies Unit, to be the new head of AHL, replacing Tim Wong, while Luke Ellis, head of fund of funds unit FRM, has become Man's president.

But this has not fully addressed analyst concerns about the poor performance of AHL, a $16.3 billion computer fund named after 1980s founders Michael Adam, David Harding and Martin Lueck, which has been performing poorly.

"It (the reshuffle) doesn't address, at least in the short term, the fundamental problem, which is AHL," said Numis analyst David McCann, who rates the shares a sell.   Continued...

A man passes a sign for Man Group hedge fund firm in London November 6, 2008. REUTERS/Luke MacGregor