Man crisis after arrest and cash leak
Thursday 28 February 2013
The scale of the crisis facing Man Group's new boss was laid bare as clients pulled billions more from its funds and an employee was arrested for insider dealing.
The troubled hedge fund said it had suspended a worker in the GLG unit it bought for $1.6bn (£1bn) in 2010.
The employee – who is believed to be Carl Esprey, a portfolio manager – was arrested on suspicion of insider dealing and market abuse.
The company said that it was "co-operating fully" with the Financial Services Authority (FSA) but would not comment on the identity of the individual.
"Man has been informed by the FSA that the investigation concerns the individual's actions as a private individual and not as an employee of Man or GLG," it added in a statement.
The news overshadowed Man's first set of full-year results under new chief executive Manny Roman where the company reported a £745m loss compared to a £193m profit in 2011.
Man said clients had pulled out $2.7bn in the final quarter of 2012, meaning the group has now had net customer outflows in every quarter over the past four years, apart from during the first half of 2011.
"Last year was another tough year for Man," Mr Roman said.
"Trading conditions were highly challenging as markets continued to be dominated by political uncertainties in Europe and the US and macroeconomic risks. Investor appetite remained muted, and, as expected, there was a further decline in Man's product margin mix and revenues," he added.
The group has also written down the value of its GLG acquisition by a further $746m.
GLG, which was founded as a division of Lehman Brothers in 1995, was meant to diversify the group away from its computer-driven AHL fund but has so far failed to bear fruit.
Mr Roman warned that Man's outlook remained challenging.
"The number of requests for proposals and the pipeline of new mandates have increased to a degree. However, given the lead time required by institutional investors to invest, gross sales are likely to remain muted in the first half and we are yet to see a slowdown in the rate of redemptions," he said.
Man said it expected to make $100m in cost savings by the end of the year. The group has already made a number of management changes.
"We have introduced changes to senior management to further enhance Man's focus on investment performance. We will maintain our efforts to make Man lean and efficient," Mr Roman said.
- 1 Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
- 2 Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
- 3 Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
- 4 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 5 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
Jennifer Lawrence: Leaked 4Chan sex video branded 'fake' by users
Jennifer Lawrence 'naked sex video' will be leaked next, threatens 4Chan celebrity photo hacker
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...