SINCE October 2010, Man Group’s share price has fallen by more than 60 per cent – despite something of a recovery this year as its struggling AHL fund starts to deliver better returns.
The stock got another boost yesterday, rising five per cent on news that boss Manny Roman is considering a US acquisition.
The target – a long-focused hedge fund called Numeric – would certainly be a good fit. Its institutional, US clients would diversify Man’s European-heavy customer base, and mark a savvy shift away from its trend-following, algorithm driven flagship that has failed to shine in recent market conditions.
Numeric’s recent performance also bodes well: each of its three funds is up more than eight per cent over the last 12 months, and assets under management have almost doubled in just a year from just under $8bn to nearly $14bn at the end of March.
So the fit is good, and the numbers are impressive – which means the only sticking point will be price.
It’s well known that Roman has money to spend. Around $1bn in fact, a figure way above what it need to meet regulatory capital buffers. Analysts yesterday put prices varying from $300m-$700m on Numeric – a huge range that Man Group did not comment on yesterday.
Let’s hope that management get negotiations right. Numeric would be a good buy for Man, and it would be a shame if quibbles over the price scuppered a savvy deal.