Did Private Investors Punish Man Group For Buying GLG By Pulling $1.1 Billion?

GLG’s Pierre Lagrange

It was considered a step down when Man Group bought GLG after rumours that it was shopping Millennium and SAC, so what happened to them in the first quarter shouldn’t really surprise, but it still bad news:Investors pulled out $1 billion (2.3% of total assets).

There are a couple more reasons the outflows might have happened.

First, the management might not be getting along as well as investors would like them to.

Also, mergers are usually not great for the acquiring firm.

So here’s the bad news:

  • $1.1 billion private investor outflows in 1Q
  • $400 million net outflow from institutions in 1Q

Institutional investors like fund of funds might come back. Private investors are probably less likely to.

The good news:

  • Private investor sales were $500 million (bringing net private investor outflows down to $600 million)
  • Lagrange still has great hair, and is friends with Brad Pitt

CEO Peter Clarke said publicly:

“The quarter to June 30 has seen a return to increased volatility and uncertainty in financial markets.”

And Man Group said it still has a capital surplus of around $1.5 billion and available liquidity resources of about $5.4 billion. Man’s total assets now after buying GLG are $63 billion.

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