Login or Register

Featured Blogger

Charity Skelton

Red-Hot Thread

"The corporate brand is not only used to improve competitive positioning and express company aspirations, it can also be a powerful tool to motivate employees."

Latest Forum Posts

in Cash Concerns by ShawnaSommers, 09-04-11 15:08
Re:Senate fails to repeal 1099, what does it mean?
in In Compliance by annearf, 07-04-11 16:44
Your favorite mobile/tablet apps for business?
in BizTech by m_goodman, 07-04-11 11:46

CFOZone Experts

Opinions and views from expert CFOZone members.

May 17

Two major hedge fund firms to merge

Posted by Stephen Taub in pension fundsmergerinstitutionsendowmentsDealsasset managementalternative investments

Stephen Taub

In a somewhat unusual deal involving two of the handful of global hedge fund firms that are publicly-traded, London's Man Group plc is buying London-based GLG Partners for about $1.6 billion, resulting in a money management firm with about $63 billion under management.

Under the terms of the deal, GLG's shareholders will receive $4.50 per share in cash.

Interestingly, however, GLG's principals--Noam Gottesman, Pierre Lagrange and Emmanuel Roman--will receive 1.0856 new Man shares for each of their shares of GLG common stock, valuing each share of GLG stock at just $3.50. However, they can receive as much as $4.25 per share in new Man shares, still leaving them with less than the other shareholders.

Man is most associated with its Man AHL Diversified Plc, the computer-driven strategy which accounts for about half of its assets. It lost money in 2009.

GLG went public in 2007, and its stock peaked later in the year.

It currently has $33.7 billion in assets; $12.3 billion are from hedge funds while the rest is from long-only funds. In fact, the long-only funds have heavily driven GLG's growth of late.

In general, however, the deal reflects the current trend among hedge fund firms to launch long-only funds, which could be perceived by corporate boards as more stable investors since they generally stick with stocks for longer periods and don't sell them short.

The deal also reflects the hedge fund industry trend toward larger firms, which are favored by the big institutions--pension funds, endowments, and foundations--which are driving the growth in alternative investments. In fact, despite the market implosion in 2008, hedge fund assets in general have been roaring back. According to Hedge Fund Research, total industry capital topped $1.67 trillion in the first quarter, just shy of the peak of $1.93 trillion in the second quarter of 2008.

"The fit between the two businesses is excellent; across investment strategies, geography and investor base," said Man chief executive Peter Clarke. "Man's quantitative and multi-manager expertise complements GLG's long track record in discretionary investment strategies, and both firms focus on liquid, transparent and dynamic trading."



Comments (0)Add Comment

Write comment
You must be logged in to post a comment. Please register if you do not have an account yet.


Market Data

Copyright © 2009-2011 CFOZone. All rights reserved. CFOZone is a property of PSN, Inc.