London — Man Group has appointed a new head of its struggling flagship hedge fund, as part of sweeping changes under incoming CEO Emmanuel Roman to revive investment performance and win back clients to the embattled hedge fund firm.
The reshuffle is the most significant change yet announced by Mr Roman, the chief operating officer, who will take over from CEO Peter Clarke at the end of the month.
Man Group, which has $60bn in assets, has had net customer outflows in every quarter over the four years to September last year — apart from two quarters in the first half of 2011 — after poor returns from some of the group’s funds. The shares have more than halved since the start of 2011, prompting investors to push for change.
Under Mr Roman’s reshuffle, Sandy Rattray, the head of Man’s Systematic Strategies business, will become CE of Man’s $16.3bn computer-driven fund AHL.
A Man spokesman confirmed Mr Rattray’s appointment.
Quantitative fund AHL, which accounts for a large chunk of Man Group’s earnings, has lost money in performance terms in both 2011 and last year.
AHL’s previous CEO, Tim Wong, has become executive chairman of AHL, while MSS, which also builds computer-driven hedge funds, is being merged into AHL.
Both Mr Rattray and Mr Wong will sit on Man Group’s executive committee, which has been enlarged from about 10 to about 15, the spokesman said.
Luke Ellis, who heads Man’s fund of funds unit FRM, has become president of Man, overseeing all three divisions — AHL, FRM, and GLG.
Mark Jones, GLG’s chief operating officer, has become co-CEO of GLG.
Details of the changes have been circulated in a series of internal announcements over the past month. Man is set to report 2012 results on Thursday next week.
Mr Roman joined Man in 2010 when it bought GLG, the hedge fund where he was CEO.
Man’s purchase of GLG was designed to try and boost assets and diversify away from AHL. But the fund still accounts for an estimated 70% or more of Man’s earnings.
AHL, like other so-called managed futures funds, tries to make money following trends in global markets. But markets have lacked clear, discernible trends in the past two years.
Last week, reports said investors had pulled $1bn from hedge fund giant Winton, a rival managed futures hedge fund firm set up by David Harding, a co-founder of AHL.
"I believe that outflows accelerated further in the fourth quarter, and Man will likely report massive year-on-year declines on every metric — revenues, profit and AUM (assets under management), in addition to lacklustre investment performance," RBC Capital Markets analyst Peter Lenardos said. "The recent increase in the share price looks overdone in my opinion."
Man Group’s share price is rebounding after declining to 63.25p, a 13-year low, in July. It was up 2.4% to 110p on Monday, giving it a market value of £2bn.
The rise has provided a boost for high-profile hedge fund manager Crispin Odey, who sharply increased his stake in Man last October and is now one of the biggest shareholders in the company.