Top ten hedge fund firm Man Group said on Friday it is considering splitting off its brokerage arm into a new £2 billion ($3.9 billion) company. The de-merger would separate its U.S. brokerage unit and list it in New York.
Man group has funds under management of more than $61 billion as of January. The listing of a majority interest in the unit, Man Financial, will take place in the third quarter of 2007, subject to market conditions remaining favorable, the firm said. It will be renamed MF Global following the separation, which is subject to shareholder approval, and net proceeds will be returned to shareholders later in the year.
A Man Group spokesman said; "Man regularly reviews the structure of its business, in line with our commitment to achieve superior returns for our shareholders...... Separation will allow each business to focus even more effectively on their separate growth strategies and take advantage of the significant business development opportunities in each of their industries."
Man Group, best-known for its hedge fund activities, believes its brokerage business is being overlooked and would be worth far more as a separate company. Man Financial's Managing Director Kevin Davis will become CEO of the new group. Chris Smith will be chief operating officer and deputy CEO, while Amy Butte will be chief financial officer. The non-executive chairman will be Alison Carnwath.
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