Man Group Said to Talk With SAC, GLG in Search for U.S. Deals

Date: Friday, March 26, 2010
Author: Bloomberg

Man Group Plc, the biggest publicly traded hedge-fund manager, is scouting investments, acquisitions and distribution deals in the U.S. and has spoken with firms including SAC Capital Advisors LLP and GLG Partners Inc., according to two people with knowledge of the discussions.

The talks were preliminary and may not lead to a deal, said the people, who asked not to be identified because the meetings were private. Man Group, which managed $42.4 billion at year- end, discussed buying a stake in SAC Capital or distributing its funds, one of the people said. The London-based company is considering a takeover of GLG, one of the people said.

“The opportunity set is phenomenal at the moment, there’s probably not much that we couldn’t do if we wanted,” Man Group Chief Executive Officer Peter Clarke said on a conference call with investors yesterday. “But it’s not something we’re going to rush into.”

Jonathan Gasthalter, a spokesman for Stamford, Connecticut- based SAC Capital, and David Waller, a spokesman for New York- based GLG, declined to comment. Simon Anderson, a spokesman for Man Group, said the firm doesn’t comment on market speculation.

Clarke said on the call that he’s seeking to add “equity long-short capability” inside the firm, which in the interim it could “access through others.” Long-short funds bet on rising and falling stock prices.

SAC Capital, which manages $12 billion, was founded in 1992 by billionaire Steven A. Cohen, who is known as an aggressive stock trader. Cohen was approached in 2007 by investors interested in buying a stake in the closely held firm, a person familiar with the talks said at the time. No deal was ever disclosed.

GLG Stock Hammered

GLG went public in November 2007 through a merger with Freedom Acquisition Holdings Inc., which was set up with the purpose of acquiring a company. The shares have fallen 80 percent since, closing yesterday at $2.68 on the New York Stock Exchange.

The company oversees $22.2 billion in more than 40 funds with strategies including long-short equity, macro, emerging markets, credit and convertible bond, according to its Web site. In 2009, it completed the acquisition of Societe Generale SA’s asset-management unit in the U.K., adding long-only funds.

Man Group said March 24 that it expects to post a drop in full-year profit after its largest fund posted its first annual loss, cutting performance fees by three-quarters.

Assets Decline

The firm forecast profit before tax and adjusted items of $510 million in the year through March, down from $743 million a year earlier. The company was expected to report a $555 million pretax profit for the year, according to the average estimate of 11 analysts surveyed by Bloomberg.

Assets under management fell 7.7 percent since December to $39.1 billion.

Man Group, founded in 1783 as a sugar broker, transformed itself over the last three decades into the biggest listed hedge-fund firm in the world. In 2002, it bought Swiss fund manager RMF Investment Group for $841 million and in 2003 bought a 25 percent of BlueCrest Capital Management Ltd., the London- based hedge fund run by Michael Platt.

Man AHL Diversified Plc, the trading program that accounts for about half of Man’s assets, dropped 17 percent in 2009 and is little-changed this year, according to data compiled by Bloomberg. Reversals in fixed-income, currency and metals markets made 2009 the worst year since l987 for funds similar to AHL, according to Fairfield, Iowa-based BarclayHedge, which has tracked so-called trend-following funds for 25 years.