Man's Fink to Step Down as Chief; Clarke to Take Over

Date: Thursday, September 7, 2006
Author: Bloomberg.com

(Bloomberg) -- Stanley Fink, who built Man Group Plc into the world's largest publicly traded hedge-fund manager, is stepping down as chief executive officer after almost two decades at the company and as returns in the industry decline.

The 48-year-old Fink will be replaced by Finance Director Peter Clarke, 46, London-based Man Group said in a statement today. Fink plans to spend more time on philanthropy.

Fink, the CEO since 2000, rode a boom in the popularity of hedge funds that swelled Man's assets to $54 billion from $4.7 billion and increased his pay to 6 million pounds ($11 million), making him one of Britain's best paid executives. A doubling in the number of hedge funds since 2001 has shrunk industry returns to almost half the level of the 1990s.

``Fink has done a good job, but Clarke is one of the best CFOs I have met,'' said Joerg Schneider, a fund manager at Union Investment GmbH in Frankfurt, which holds Man Group shares. ``He will be a good follow up.''

Man Group shares fell 2.5 pence, or 0.6 percent, to 433.5 pence as of 12:44 p.m. in London, valuing the company at about 8.3 billion pounds. The stock gained 54 percent in the past year.

Hedge Fund Boom

The average hedge fund gained 9.2 percent last year, well below the average annual return of 16 percent during the 1990s, according to Chicago-based Hedge Fund Research Inc. Diminishing returns haven't deterred investors. Hedge funds, which oversee $1.2 trillion, attracted $42.1 billion in the second quarter, the biggest increase since at least 2003, Hedge Fund Research said.

Man Group's new investments more than tripled in the fiscal first quarter as clients added money amid global market declines, the company said in July. Gross inflows totaled $5.3 billion in the three months through June 30, compared with $1.6 billion in the year-earlier period.

The company, which traces its origins to a sugar business founded by trader James Man in 1783, went public in 1994 and sold the agricultural business to its management team in 2000. From then on it focused solely on hedge funds and futures.

In the past year, Fink bought the futures brokerage arm of Refco Inc., which collapsed in October 2005, and 70 percent of the U.S. unit of Eurex, the futures arm of Germany's Deutsche Boerse AG.

Man's flagship AHL hedge fund, which more than doubled during Fink's time at the helm, lagged behind the surge in Man Group's own shares during the period.

Philanthropist

Fink will keep his role as chairman of the strategic investment committee of Man Investments, the company said. It plans to appoint a new finance director ``in due course.''

``Stanley has indicated to the board his wishes to become non-executive, not least in order to be able to commit more time to personal interests, in particular his philanthropic activities,'' Chairman Harvey McGrath said in the statement.

Fink, a fan of the Manchester United football team, ranks ninth in this year's Sunday Times Giving Index, which tracks philanthropy in Britain. He is 511th on the list of the wealthiest people in the U.K., according to the newspaper. Fink holds 25.8 million Man shares, with a current value of about 110 million pounds.

``I give to human charities and not animal charities,'' he told Britain's Independent newspaper in January 2005. ``I don't do it out of guilt, I do it because it needs to be done.''

During Fink's tenure, Man became the lead sponsor of Britain's prestigious Booker literature award, now called the Man Booker Prize.

Fink, whose father made lampshades and ran a grocery shop in his native Manchester, had to have brain surgery after being diagnosed with a brain cyst in 2004. He returned to work after about two months.

To contact the reporters for this story: Andrei Postelnicu in London at apostelnicu@bloomberg.net . Edward Evans in London at at eevans3@bloomberg.net ;