The hedge fund Godfather

After making Man the largest listed hedge fund in the world, Stanley Fink is stepping down to dedicate his time to philanthropy. By Nick Clark

Sunday 23 October 2011 04:03

Stanley Fink, known as "The Godfather" of UK hedge funds, has called time on his career at Man Group, the industry giant he helped create, after two decades. Unusually for a much-feted manager 15 years off retirement age, he is severing ties with the industry to dedicate his time to philanthropy work.

Man, which Mr Fink has helped to turn into the largest listed hedge fund in the world, yesterday announced that Mr Fink "wishes to retire" from the group, and so will not seek re-election as a director at the annual general meeting in July.

Mr Fink, 50, said: "I have spent more than 21 years at Man Group, during which the company has undergone immense change which has seen it emerge as a leading player in the alternative asset management industry. I have many commercial and philanthropic interests outside Man Group to which I am increasingly committed and I am eager to pursue these, and other new opportunities, more fully."

Colleagues and rivals queued up to heap praise on Mr Fink yesterday. For an industry often tarred with allegations of being aggressively competitive, testosterone fuelled, shadowy and driven solely by profits, the picture emerged of Mr Fink as a well-liked and well-respected manager. One rival said: "He was unusually well liked, in an industry that is ultra competitive."

He has often been considered as a guiding light for the hedge fund industry in Europe and not just in running Man. His successor, Peter Clarke, said: "Stanley has been the torchbearer of the public face of hedge funds when most did not want to be public. He has clearly had a strong role in the development of the industry."

Charles Beazley, the president of Nikko Asset Management Europe, added: "Stanley always got the big picture. For him it wasn't enough for Man to be successful, others had to be successful too and to be encouraged. It wasn't simply the pursuit of profit, but of good governance and a strong ethical foundation for the industry which motivated him. If you had those qualities, Stanley was unfailingly helpful and supportive. This is leadership."

Mr Fink was educated at Manchester Grammar School, before going on to study law at Trinity Hall, Cambridge University. He took his initial steps into the financial services business as a trainee accountant at Arthur Andersen, before serving at Mars and Citibank.

The move to Man came in 1987, when he was appointed a director specialising in mergers and acquisitions. His rise was relatively rapid, following his appointment as finance director in 1992, and he took over running the investment management business two years later. As his stock grew, Mr Fink was appointed chief executive in 2000, and set about implementing a period of change and sustained growth at the group. Mr Beazley said he was regarded highly by his peers in the industry. "He has a great reserve of intelligence, as well as a quiet charisma. I think he got the best out of people," he added.

When Mr Fink took over as chief executive, Man had $4.7bn of assets under management. According to yesterday's results, at the end of March it had $74.6bn. The shares have risen from just over 60p at the turn of the century to 620p yesterday.

Man Group celebrates its 225 anniversary this year, although today's business is unrecognisable from the commodities shop set up by sugar broker James Man. While always maintaining a healthy respect of the group's history, Mr Fink has driven some of its biggest changes.

As financial director, he was on the management team responsible for floating the group in 1994, an unusual move for the notoriously secretive hedge-fund industry at the time. Then in 2000, it spun out its agricultural business in a management buyout, which signalled a break with its past and saw the group change its name from ED&F Man Group. The move to concentrate solely on alternative investment was realised when it spun out its US brokerage last year. The division listed on the New York Stock Exchange as MF Global. Man developed through "organic" but was never afraid to target acquisitions under Mr Fink's leadership. These included the takeovers of Mint, AHL, Glenwood and assets from the collapsed US brokerage Refco in 2005. Man said in October that it would be looking to pick up some more independent groups that had suffered in the wake of the credit crunch.

Jon Aisbitt, Man Group's chairman, said yesterday: "Stanley's vision, business development skills and pioneering passion for the opportunities in the alternative asset segment of the investment management industry have been at the heart of Man's growth and success. Under his leadership, Man was built through a dynamic combination of organic growth and selective acquisition."

Colleagues said Fink's outlook changed in 2004, when he underwent an operation to remove a benign tumour from his brain. Despite returning to work in weeks he set about planning his exit from the group and at the same time increased his charity work.

He is a trustee for Ark – Absolute Return for Kids – the children's charity supported by a number of European hedge fund managers including Paul Marshall and Ian Wace, founders of Marshall Wace. He is also chairman of the Evelina Children's Hospital Appeal Committee, which aimed to raise £10m to help equip a new children's hospital at Guy's and St Thomas' NHS Foundation Trust and sponsors the city academy school Burlington Danes.

Beyond the charitable work, Mr Fink has donated money to the Conservative Party, including to Boris Johnson's successful campaign for London Mayor, and has agreed to lead a working group on an environmental market for the shadow Chancellor, George Osborne.

While he has stepped back from day to day management at Man, the succession was closely managed. The group started preparing a year before Mr Fink announced he was to relinquish his position as chief executive in September 2006 in favour of a newly created non-executive deputy chairman role.

Daniel Havercroft, an analyst at Investec, said: "He is highly regarded in the industry and among investors. He is credited with much of the transformation of the business, and on that basis, to lose him even as a non executive is disappointing. However, the move is not unexpected and he leaves a strong team in place." He handed over to Mr Clarke, with whom he has worked for the past 14 years, in March last year.

He leaves as Man posted strong results yesterday, shrugging off the severe impact of the credit crunch on some of its rivals. The group posted a 60 per cent boost in pre-tax profits, which rose to $2.07bn for the year to the end of March. Funds under management were also up 20 per cent, sending the shares up over 5 per cent at the close.

Mr Clarke said the results were driven by "our wide range of investment management capabilities combined with conservative product structures, both of which have allowed us to perform for our investors through some of the most turbulent markets in recent memory."

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