Man Group enters long-only market with GLG acquisition
UK - Hedge fund manager Man Group has acquired GLG Partners in a transaction valued at $1.6bn (€1.3bn) that will give Man Group its first access to the long-only market.
The acquisition of GLG Partners, which is expected to be completed by the end of September 2010, will create an alternative investment management company with approximately $63bn funds under management.
At the end of March 2010 GLG, a multi-strategy investment manager that offers a range of funds and managed accounts covering alternatives, long-only and UCITS III, had net funds under management of approximately $23.7bn.
In the statement announcing the acquisition, it was claimed the low correlation of performance between Man Group's quantitative investment style and GLG's discretionary investment approach would result in "greater stability in the combined performance fee prospects and the creation of new high margin products".
Jon Aisbitt, chairman of Man, said the transaction is "central to Man's stated strategy of acquiring high quality discretionary investment management capability to broaden our range of diversified, liquid strategies for the benefit of our investors".
Man does not have an existing long-only product offering, while GLG - which bought Société Générale Asset Management's London based asset management subsidiary in 2008 - has always provided clients with long-only strategies and currently has approximately $12.3bn funds under management in long-only funds. (See earlier IPE article: Hedge fund specialists to buy SGAM UK).
A spokeswoman for Man said: "It is an integral part of the [GLG] product offering and generates significant management fees. GLG's long only products also complement AHL, Man's managed futures manager, due to the lack of correlation. We see significant opportunities to include GLG's long only products in our retail and structured product offerings."
Noam Gottesman, chairman and co-CEO of GLG, added: "This is a transformational step for GLG. We have known Man for many years and can be certain that our two businesses are highly complementary, both focused on delivering long-term performance but each with differing client bases and uncorrelated investment strategies."
The acquisition is structured as a cash offer to GLG public stockholders priced at $4.50 a share, alongside a share offer to the GLG principals, with the cash payments funded by Man's existing cash resources.
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