Man Group

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Man Group plc
Public
Traded as LSE: EMG
Industry Financial services
Founded 1783
Founder James Man
Headquarters Riverbank House
2 Swan Lane
London
United Kingdom
Area served
 Worldwide
Key people
Products Investment products
Revenue Decrease US$1,150 million (2014)[1]
Increase US$391 million (2014)[1]
AUM Increase US$78.1 billion (December 2014)[1]
Number of employees
 1078 (March 2015)
Divisions
Website Man.com

Man Group plc (Man Group) is an alternative investment management business initially founded as a sugar cooperage and brokerage by James Man in 1783. It provides a range of funds for institutional and private investors globally and is the world's largest publicly traded hedge fund, reporting $78.1 billion in funds under management as of March 2015.[2][3] The firm is headquartered at Riverbank House in London and employs over 1,000 people in various locations worldwide.[4] The company is a noted sponsor of the arts and charitable initiatives, including the Man Booker Prize and the Man Charitable Trust.

Under CEO Emmanuel "Manny" Roman the firm has made several acquisitions as part of its strategy to diversify the business, particularly in the United States, including Man Numeric, a quantitative equity manager. In recent years the firm has seen a shift towards institutional clients.

History

The company was founded by James Man in 1783 as a sugar cooperage and brokerage, based in Harp Lane in Billingsgate. The following year Man Group won the contract to supply the Royal Navy with the rum for its daily "rum tot", a tradition under which all sailors were allocated a daily rum ration. This tradition continued until 1970, with Man Group holding the contract throughout the entire period.[5] The company further expanded from sugar and rum into other commodities such as coffee and cocoa. The company traded as a commodities business throughout the 19th and 20th century, gradually diversifying into financial services following the advent of financial exchanges to hedge commodity exposures.[5]

The firm was renamed ED & F Man in 1869, based on the initials of James Man's grandsons Edward Desborough Man and Fredrick Man. ED & F Man listed on the London Stock Exchange in 1994. In 2000 the company divided into two entirely separate businesses, with Man Group plc focusing exclusively on financial services and ED & F Man, the commodities division, being taken private in a management buy-out.[6]

In 2007 following the demerger and flotation of its brokerage business (known as MF Global) on the New York Stock Exchange, Man Group moved into its present form as an investment management business.[7]

Man Group attained its current structure over time through acquisition. Man AHL is the oldest investment manager of the group, having been acquired over time from 1989 to 1994. Man Group’s other investment managers were acquired between 2010 and 2012. Man Group acquired Man GLG, previously GLG Partners, in 2010 for $1.6 billion, then Man FRM in 2012 and Man Numeric in 2014.

Structure and operations

Man Group offers hedge fund and long only products spanning equity, credit, managed futures, convertibles, emerging markets and multi-manager solutions.

The firm has key operational centres in Australia, China, Guernsey, Hong Kong, Japan, Liechtenstein, Switzerland, United Arab Emirates, UK, USA and Uruguay. The firm operates through four investment managers: Man AHL; Man FRM; Man GLG and Man Numeric.

Man AHL

Founded in 1987 and now with $14.4 billion in FUM, Man AHL is a diversified quantitative investment manager offering absolute return and long-only funds, with both momentum and non-momentum strategies. In 2014, FUM grew 21%, while returns were boosted reportedly by low oil prices and a strengthening US economy. In 2014 the Man AHL Alpha Strategy fund returned 22.8% and the Man AHL Diversified strategy fund returned 33.8%. In recent years, the manager’s sales have shifted from retail to institutional investors. Man AHL has over 100 investment professionals, based in London, Oxford, Hong Kong and Pfäffikon.

Man FRM

Established in 1991, and acquired by Man Group in 2012, Man FRM is a fund of hedge funds manager. As at December 2014, MAN FRM had FUM of $11.3 billion, of which $7.7 billion is in its managed account platform and a further $5.5 billion in commingled funds. Man FRM’s reported assets decreased by 6% in 2014, partially offset by the acquisition of Pine Grove, a US-based fund of hedge fund manager specialising in the management of credit-focused hedge fund portfolios. Man FRM's 58 research and investment professionals operate from London, New York, Tokyo, Guernsey and Pfäffikon.[8]

Man GLG

Man GLG was established in London in 1995 as GLG Partners. It was publicly listed in 2007 before being acquired by Man Group in 2010 for $1.6 billion. Man GLG is a multi-team discretionary investment manager with FUM of $30.5 billion as at December 2014. Man GLG utilises absolute return and long-only strategies across asset classes, sectors and geographies. Man Group's 2014 trading statement reported that Man GLG had had a “mixed” year, but that the January 2015 acquisition of Silvermine would boost the division’s US CLO business.[9] Man GLG’s largest position is Japan long-only equity, at $10.2 billion. Man GLG has approximately 120 employees and operates investment teams in London, New York, Hong Kong and Pfäffikon.

Man Numeric

Man Numeric was established in 1989 and acquired by Man Group in 2014. A Boston-based quantitative asset manager with $16.7 billion FUM as at December 2014, Man Numeric offers long-only, active extension and hedged equity strategies. Man Group acquired Man Numeric to build a diversified quantitative fund management business in non-momentum strategies, and to develop Man Group’s presence in the North American market. In 2014, Man Numeric’s average client portfolio out-performed industry benchmarks by 3% before fees.[10]

Strategy

Manny Roman was appointed as Man Group’s CEO in 2013. His stated strategic objectives for Man Group include: delivering superior risk-adjusted returns for clients,[11] diversifying the firm through acquisition, extending US operations, growing Man Group’s quantitative investment business, hiring and retaining talent and capitalising on the convergence between business in the developed and developing world.[12]

During his tenure, the firm has made a number of acquisitions which have diversified its product range and expanded its presence in the US, including the Boston-based quantitative asset manager Man Numeric, as well as CLO business Silvermine and credit-focused fund of funds business Pine Grove. Roman has also driven an increase in Man Group's institutional client base, including endowments, insurance companies and pension funds.

Since taking up the role of CEO, Roman has overseen significant cost-cutting at Man Group, led by CFO Jonathan Sorrell, with a $270 million cost-saving programme planned for delivery in 2015 achieved ahead of schedule.[13][14]

Mergers and acquisitions

2014 results

In December 2014 the company reported an increase in sales from $16.1bn to $21.9 billion; an increase of total funds under management to $78.1 billion (up 7% from December 2013) and adjusted profit before tax of $481 million (up 61% on 2013, following the early completion of a $270 million cost saving programme). Man Group also reported growth in its North American business, with 25% of its assets ($18.5 billion) run from teams based there and 17% of assets ($12.1 billion) run on behalf of US-based clients.[34]

RMF and Bernard Madoff

RMF, a former division of Man Group, invested 0.5% of its funds under management at the time with various 3rd party funds which, in turn, had positions in funds ultimately managed by Bernard Madoff. RMF was one of 107 financial institutions and 13,000 individuals to invest in such funds. As of 2014, 59% of all such funds have been recovered and returned to various institutions and individuals.[35]

Man Booker Prize

Man Group has sponsored The Man Booker literary prize since 2002.[36]

Described by The Telegraph newspaper as “...arguably the UK’s most prestigious" literary prize, the £50,000 award was created in 1973 to increase the reading of quality fiction and attract “the intelligent general audience”.[37][38] Each year the winner is announced at an awards dinner broadcast live by BBC Television. Inclusion into the award's shortlist and attendant press coverage is known to provide a significant boost to book sales and bookstore visits, with sales trebling in some cases.[39]

The 2014 award went to author Richard Flanagan for The Narrow Road to the Deep North, with his prize presented by Chair of judges AC Grayling at London’s Guildhall. It was the first year in which eligibility for the award was expanded to include any novel written in English and published in the UK.[40]

Man also sponsors the Man Booker International Prize. This £60,000 prize is awarded every two years to a living author with fiction published in English or translated into English. The award is intended to highlight “...one writer's overall contribution to fiction on the world stage”, with the judges considering a writer's entire body of work. The 2015 prize was awarded to Hungarian writer László Krasznahorkai. Previous winners include Philip Roth and Lydia Davis. [38]

Corporate responsibility

Man Group is a member of the FTSE4Good Index and the Dow Jones Sustainability World Index. It also supports various charitable initiatives, principally through the Man Charitable Trust.

Man Charitable Trust

Set up in 1978, The Man Charitable Trust is an independent registered charity that funds small to medium-size charities focusing on literacy and numeracy programmes, as well as programmes in support of access to education for disadvantaged people. In 2014 the trust awarded £427,075 to UK charities, including £50,000 to Beanstalk, a charity that recruits and trains volunteers to provide reading support in primary schools, and £50,000 to National Numeracy, a charity dedicated to raising low levels of numeracy among adults and children.[41][42]

The Trust is funded entirely by Man Group plc. It provides grants on an invitation to bid basis and through negotiated partnerships with selected charities; charities are assessed for inclusion partly on the percentage of their annual budget spent on administration and salaries instead of providing services. Man Group also runs a staff volunteer scheme where employees may opt to take two days paid leave to volunteer for a charity of their choice or a charity supported by the Trust.

Oxford-Man Institute of Quantitative Finance

In June 2007 Man launched a joint project with the University of Oxford, the Oxford-Man Institute of Quantitative Finance. Man Group’s initial financial commitment to the Institute was £13.75 million, one of the largest single donations to a British higher education institution in recent years.[43] The Institute brings together faculty, post-docs and students throughout the University interested in quantitative analysis of finance problems. The institute aims to develop research in quantitative finance, develop academics able to contribute to the understanding of quantitative finance and to promote and encourage independent teaching and research. Man AHL has researchers embedded within the Institute; research topics include socially responsible finance and the stability of market systems. [44]

Former sponsorships and charitable initiatives

Man Group is a former sponsor of the Man Group International Climate Change Award and the Man Asian Literary Prize.[45][46] In the 1990s, Man was a founding member of the East London Partnership, which became the East London Business Alliance, a business-community outreach charity promoting corporate social responsibility and employee volunteering.[47]

See also

References

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Further reading

  • Jenkins, Alan C., 1989, The House of Man, London, UK: Rainbird Publishing. ISBN 0-09-995370-6

External links

  1. ↑ 1.0 1.1 1.2 Lua error in package.lua at line 80: module 'strict' not found.
  2. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  3. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  4. ↑ Global 50 Funds of Hedge Funds, The Hedgefund Journal, June 2009.
  5. ↑ 5.0 5.1 Lua error in package.lua at line 80: module 'strict' not found.
  6. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  7. ↑ Man Group's MF Global unit files for IPO Reuters, 1 June 2007
  8. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  9. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  10. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  11. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  12. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  13. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  14. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  15. ↑ Man Is Feeling The Pull Of Gravity Business Week, 1 November 2004
  16. ↑ ED&F Man Group PLC acquires Glenwood Capital Investements Thomson, 10 November 2000
  17. ↑ Man Group buys Australian hedge fund group Financial News
  18. ↑ Man Group PLC acquires RMF Investment Group Thomson, 31 May 2002
  19. ↑ Man Group PLC acquires a minority stake in BlueCrest Capital Management Thomson, 31 December 2003
  20. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  21. ↑ Man Group sets sail with Pemba into credit Hedge Funds Review, April 2007
  22. ↑ Man Group PLC acquires Ore Hill Partners LLC (pending) Thomson, 31 March 2008
  23. ↑ Man ECO announces $635 million raised for China Methane Recovery Fund CPI Financial, 10 April 2008
  24. ↑ Man Group PLC acquires a minority stake in Nephila Capital Ltd Thomson, 6 June 2008
  25. ↑ Man agrees takeover of GLG FT, 17 May 2010
  26. ↑ Man Group to acquire rival FRM FT, 21 May 2012
  27. ↑ Acquisition of FRM Holdings Limited by Man Group maninvestments.com.au, 17 July 2012
  28. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  29. ↑ Man Group's flagship funds stage continued recovery Financial Times, 8 September 2014
  30. ↑ Man Group Buys Merrill Lynch's $1.2 Billion Funds of Hedge Funds Bloomberg, 8 December 2014
  31. ↑ 31.0 31.1 31.2 Lua error in package.lua at line 80: module 'strict' not found.
  32. ↑ Man Group to Acquire Silvermine Capital Management Bloomberg, 19 December 2014
  33. ↑ Man Group to buy asset manager NewSmith Financial Times, 20 February 2015
  34. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  35. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  36. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  37. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  38. ↑ 38.0 38.1 Lua error in package.lua at line 80: module 'strict' not found.
  39. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  40. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  41. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  42. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  43. ↑ Oxford-Man Institute of Quantitative Finance officially opened University of Oxford, 19 September 2007
  44. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  45. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  46. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  47. ↑ Lua error in package.lua at line 80: module 'strict' not found.
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