Report says Man Group is mulling spin-off of financial unit |
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Mon, 22 Aug 2005 11:05
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LONDON: British hedge fund manager Man Group Plc is said to be considering the option of spinning off its brokerage arm into a new company.
According to reports in the British press, the London-based fund, which manages nearly 25 billion pounds for the super rich in the world, and sponsors the Man Booker prize, feels the broking unit, Man Financial, is being neglected and as a separate entity it can handle as much 2 billion-pound FTSE 100 business.
The company, however, brushed aside any such move saying, "Man regularly reviews the structure of its business in line with our commitment to achieve superior returns for shareholders. No decision has been taken to separate the Man Financial business from the remainder of the Man Group."
London's The Financial Mail had put a story Sunday speculating Man Financial, now the world's largest futures and options brokers, is undervalued and would be worth more as a separate company.
The paper said Man is going by the example of the $3.5 billion flotation by New York-based futures broker Refco Inc. The company executives are now in the process of considering a detailed demerger plan, the paper said.
Man Financial runs eight offices around the world, including in New York, Chicago, Paris and Hong Kong and employees some 1,200 people. It makes up 15 to 20 per cent of the company's profits. Hedge funds earn a percentage fee on their total funds under management along with a performance bonus.
Man was set up in 1738 as a sugar trading company. In 2000, the company had spun off its legacy agricultural business through a management buyout to become a pure financial services company. The company has a market value of 5 billion pounds.
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