GLG Trio Sit on $220 Million Man Loss
Three principals of hedge fund GLG Partners are sitting on a $220 million paper loss two years on from their firm's acquisition by Man Group in the industry's biggest merger.
Monday will mark the first time that Pierre Lagrange, Emmanuel Roman, and Noam Gottesman, who swapped their stakes in GLG for shares in Man on Oct. 14, 2010, will be able to dispose of their holdings, if they choose.
Shares in Man have dropped from 264 pence when the merger closed two years ago to 90 pence on Friday, having traded as low as 60 pence over the summer.
Man declined to comment. Sources close to Mr. Lagrange and Mr. Roman said neither had plans to sell shares. They were said to be unaware that the lock-up on their holdings was even due to expire. Mr. Gottesman has stepped back from any management role in the group and could not be reached directly for comment.
Mr. Roman was recently made president and exercises considerable influence as chief operating officer.
Mr. Lagrange oversees GLG's investments and has been newly appointed as chairman of Asian operations. He owns 69 million Man shares, directly or through trusts, making him the company's third-largest shareholder, while Mr. Gottesman owns 41.9 million and Mr. Roman owns 19.5 million.
Man's takeover of GLG for $1.6 billion was billed as a "transformative" step that would stabilize the combined company and stem investor outflows.
The protracted European economic crisis has sapped investor confidence and dented performance for the company's funds, dragging down profits in the process and weakening Man's pitch to GLG shareholders that the combined business would be more resilient.
Amid mounting concerns from institutional shareholders, Peter Clarke, Man chief executive, embarked on a reordering of its business earlier this year.
In addition to measures designed to improve transparency around earnings, including a move to drop a progressive dividend policy in May, Man has moved to restructure its listed status and appointed a new finance director — Jonathan Sorrell, son of Martin Sorrell, chief of WPP — as part of an executive reshuffle.
It has launched new products in recent months and hopes to begin seeing inflows in them.
An interim management statement is due from the company on Thursday. Analysts expect to see continued outflows from the group, in spite of a fillip to assets under management caused by Man's acquisition of fund of funds FRM last quarter. Assets under management stood at $52.7 billion at the end of June.