RMF, Glenwood renamed as Man Investments

Date: Friday, June 12, 2009
Author: Bill McIntosh, Hedge Fund Journal

The newly amalgamated business merging Man Group’s funds of hedge funds units, RMF Investments and Glenwood, is to be named Man Investments. The renaming comes amid a reorganisation of the businesses that is forecast to trim costs by $30 million annually from 2010.

It is expected that most of the savings will be made from staff redundancies as the two units are combined into Man Investments. The changes are part of a process that is underway and is expected to run for some weeks. The revamp coincides with a plan to dramatically increase the use of managed accounts across the entire group.

Since announcing that RMF and Glenwood would be merged in April, Man executives have been assessing the relative strengths of each organisation. It is expected that the branding of the underlying funds will not change, though other decisions about branding are pending.

RMF had assets of $16.1 billion at March 31. Glenwood had assets of $6.9 billion including the assets it absorbed when Man Global Strategies, another fund of funds, was rolled into it last year.

However, both units have faced challenges. RMF suffered a reputational knock from having $360 million invested with fraudster Bernard Madoff. Glenwood sidestepped exposure to Madoff, but it has grown less rapidly than might have been expected after Man acquired it in 2000.

The future headquarters of Man Investments is also under deliberation. Man has said it is committed to keeping the lead operating bases for RMF in Pfäffikon, Switzerland and for Glenwood in Chicago, and retaining other operating locations in Singapore, London and New York.

John Rowsell, chief investment officer of Glenwood, and Herbert Item, the CEO and chief investment officer of RMF, are remaining with the new business. Item retains the CIO post in Man Investments, while Rowsell has been delegated responsibility for all business, operational and risk functions.

In addition, Man Group CEO Peter Clarke is taking a more active role in the new business with both Rowsell and Item reporting to him. Given Clarke’s 16-year experience on the operational side, including a stint as chief financial officer, it is clear that the Man Investments re-launch is pivotal to the firm’s long-term prospects.

The move to amalgamate the funds of funds businesses is Man’s latest bid to reduce costs. Earlier it cut over 200 positions from a base of about 1800 employees globally. The shrinkage coincided with AUM, including around $20 billion with managed futures fund AHL, falling from over $70 billion in 2008 to around $44 billion in late May.

Clarke will be at the annual GAIM conference in Monaco next week. He is to appear on a panel to discuss the future of active management and the role of alternative investments.