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Money managers under the microscope

from DealZone:

In man vs machine, GLG has Manly appeal

Hedge fund firm Man Group apparently pricey deal to buy GLG Partners gives Man – the world’s biggest listed hedge fund -- better access to the large and lucrative U.S. market. It also counts as a small win for the human race in its apocryphal war for investors' funds with cheaper, faster and -- many would argue -- far more dangerous algorithmic trading machines known as black boxes.

The $1.6 billion cash-and-shares deal represents a heady 55 percent premium to GLG's closing price on Friday. Clearly some investors are worried it's a little too rich. It has so far driven the shares of Man – which had already lost about a fifth of their value since mid-April -- down by a little more than 8 percent.

London-based Man has long been seen as needing more inroads into the U.S. market to take on industry leader JP Morgan. As Joel Dimmock and Laurence Fletcher report, the purchase would also dilute Man's reliance on its flagship black box fund AHL which badly lagged rivals last year. What do you do when the black box fails? Start investing in people again.

It is easy to see how the deal would have to be rich, since it pays up for talent that it needs to keep interested. A $500 million payout in shares, locked up for three years, ensures GLG principals Noam Gottesman, Pierre Lagrange and Emmanuel Roman don’t take the money and run. The message needs to be just as clear for the rest of GLG’s talent, which has numbers for super-rich clients and sovereign wealth funds.

Morning line-up

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Hedge fund stories from the past 24 hours from Reuters and elsewhere:

rtxcg5sWill ETFs replace hedge funds?…. No – Seeking Alpha

Hintze the Prince’s philanthropist – Bloomberg

Hedgies to top stocks, bonds in 2010 – Reuters

Calpers probes hedge fund advisors – LA Times

Managed futures on the rack – Reuters

Onshoring the hedge fund industry

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Hedge fund executives are increasingly talking about the “onshoring” of the industry — new funds being domiciled in Luxembourg rather than Cayman, their traditional home — and our story today about RCM shows more and more are putting it into practice.

rtxdixpThe firm, which has less than $200 mln in hedge fund assets, hopes to raise at least $100 mln with two new funds, including a Luxembourg-domiciled Ucits equity fund.

Man Group still waiting for the wave

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Shares in Man Group, the world’s biggest listed hedge fund firm, are up strongly today after it finally reported a rise in assets.

rtxabt1Like many hedge fund firms, Man has suffered during the industry’s downturn, with assets falling from $70.3 bln a year ago to $43.8 bln currently.

The use of UCITS

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Hedge funds are continuing to react to potentially seismic shifts in regulation.

rtr27xy2A number of firms, notably Man Group and Cheyne, are debuting onshore funds that will use the ucits structure — not only widening the potential pool of investors but also sidestepping the EU’s new draft directive on non-ucits funds and the surrounding uncertainty as the draft is debated.

Today Veritas said it is launching a long/short China ucits fund for top fund manager Ezra Sun, targeting an annual return of 15-20 percent.

Morning line-up

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Hedge fund stories from the past 24 hours from Reuters and elsewhere:

rtxcg5s

Fuld says being “dumped on” for Lehman failure – Reuters

MF Global starts Japan brokerage – Bloomberg

Despite UK taxes, funds stay in London – WSJ

US hedge fund locks horns with Chinese tycoons – South China Morning Post

Pushing back against energy speculation limits – Institutional Investor

Morning line-up

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Hedge fund stories from the past 24 hours from Reuters and elsewhere:

 
rtxcg5sMan’s gotta do it: Hayes on CEO ambitions at Man Group – Financial Director

Next generation of family office leaders seek change – Hedge Funds Review

Hedge funds target financials – WSJ

Bank funds of funds suffer – NY Times DealBook

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