Man needs one small step – to diversify from structured products

Date: Thursday, November 1, 2012
Author: Neil Wilson, Hedge Fund Intelligence

It is not surprising that Man sought to diversify through GLG and FRM to try and reduce dependence on structured products related to AHL

It was not long ago that Man Group, the London-listed investment house, appeared to have a uniquely profitable business model – the envy of rivals, and seemingly impossible to replicate. Forged in the heyday of ex-chief executive Stanley Fink, it seemed to generate fees – and largesse for the group – from every angle you looked.

Building on relationships from its origins as ED&F Man in soft commodities, Man developed investment products that sold in the billions to investors around the world. Its distribution network seemed particularly strong in markets difficult to get at for many newer hedge fund firms – in regions such as Latin America, the Middle East and South-East Asia.

Man’s products often had high-looking front-end fees – making handsome commissions for the sales team. They also came with what some viewed as high management fees – plus performance fees of course. The fees, however, did...