Hedge funds: GLG brings Man some balance
Diversification and scale key to deal; Unlikely to spur other M&A say participants
GLG’s valuation at listing in 2007 – twice the value Man has placed on it
Man Group’s acquisition of hedge fund GLG Partners will create the largest independent hedge fund manager in the world, with around $63 billion in combined assets under management. Man Group announced in mid-May that it would be acquiring GLG Partners for $1.6 billion. Up until this year, Man Group had focused on buying smaller hedge fund managers, but since January 2010 there had been speculation that it might be stalking a larger acquisition. Among mooted targets were Millennium Partners, SAC Capital Advisors and Gartmore.
Jon Aisbitt, chairman of Man Group, says the acquisition will provide diversification, marrying GLG’s "expertise in discretionary investing with Man’s quantitative skills and... distribution and product structuring".
It makes sense, says one London-based hedge fund manager. "Man’s main business is its black box funds and geeky quantitative trading strategies. The firm needs to diversify into broader-based strategies." He is referring to AHL, which uses computer algorithms to make investment decisions. AHL contributes $21.1