Man Group Plc (EMG), the biggest publicly traded hedge-fund manager, said Manny Roman will replace Peter Clarke as chief executive officer after the firm’s biggest fund underperformed.
Clarke, 53, will step down from the board on Feb. 28, the London-based company said in a statement today. Roman, the firm’s chief operating officer, joined Man Group when the company purchased GLG Partners Inc. for $1.6 billion in 2010. The stock jumped 5 percent in London trading.
Man Group has struggled as some of its products, including its AHL computer-algorithm-driven flagship fund, lag their historical returns and clients pull money. The stock has fallen 38 percent this year, even as Clarke introduced a plan to cut almost $200 million in costs to boost returns to shareholders and a management shakeup in June saw Jonathan Sorrell, a former Goldman Sachs Group Inc. (GS:US) executive, become finance director.
The share jump “suggests those trading have taken it positively, perhaps thinking a change of blood could be more radical in transforming the business,” said David McCann, a London-based analyst at Numis Securities Ltd. with a sell rating on the stock. “Long term, it will be tough. All the profits are coming from a single fund that’s under-performing badly, and you can’t change what it does.”
Man Group shares closed 3.65 pence higher at 77.30 pence, giving the company a market value of about 1.4 billion pounds.
AHL, Man Group’s biggest fund and most significant profit generator, relies on computer programs to spot profitable trades in futures markets. It was down about 14 percent on average from its high-water mark at the end of the third quarter, the company said in October. That’s the point at which the fund can charge performance fees to existing investors. AHL’s assets under management were $16.3 billion on Sept. 30, down from $19.5 billion as of March 31.
After joining Man Group as operating chief, Roman oversaw the move of former GLG colleagues to key positions. Raffaele Costa replaced Martin Keller as head of sales for North America and Europe in 2010, while Richard Phillips took over from John Bennett as head of U.K. retail that year.
Roman joined GLG as co-CEO with Noam Gottesman in 2005 after 18 years at Goldman Sachs, where he was a partner and co- head of the European equities division. Gottesman, also a Goldman Sachs alumnus, founded GLG with Pierre Lagrange in 1995.
Man’s outflows increased 57 percent in the third quarter, while total assets under management rose to $60 billion, up from $52.7 billion at June 30. The acquisition of FRM, a fund-of- hedge-funds manager, added $8.3 billion to that figure as it was completed during the quarter. Man Group said in October that its funds added $500 million overall through positive performance.
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