Man Group Financial Risk Management
Man Group Plans to Buy Financial Risk Management
Man Group (EMG.LN), the London-based hedge fund giant, has announced that it will buy Financial Risk Management Holdings. The latter is a hedge fund research and investment specialist and the purchase of FRM is intended to beef up Man Group's fund of funds and reduce its reliance on its AHL flagship fund.
U.K.-listed hedge fund operator Man Group said it will acquire Financial Risk Management Holdings, a hedge fund research and investment specialist that it said will make it less reliant on its underperforming AHL computer-based flagship fund.
Man will make no initial upfront payment for FRM but could end up paying up to $82.8 million in cash over three years, net of total net assets acquired, and a 47.5% share of performance fees attributable to FRM's existing funds under management over three years, subject to a cap.
FRM has about $8 billion in assets under management. Man Group had $59 billion in assets at the end of the first quarter.
Man Group, one of the world's biggest hedge-fund companies, has been battling investor discontent and AHL's poor performance, and Man Chief Executive Peter Clarke told reporters that through the acquisition "we are diversifying the group's earnings base." Source
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