MAN Group is determined to up the pace of its fund inflows and this is a calculated move to make that happen. By quantifying the risk associated with to date unresolved claims on the Lehman estate, the deal makes good sense, but the consequences will be still better.
While there is a chance the settlement could involve a writedown on the value of the assets, their value could well increase and Man would benefit from any improvement.
Over and beyond that, this allows Man to move on from the past. It lifts uncertainty from all affected funds, from European to north American, which allows Man to market them more aggressively.
Analysts expect Man to recoup the $355m cash and $50m regulatory capital hit within three years thanks to dramatic improvements in its fund flows. By pricing that risk and paying upfront, Man gains reputationally as well as financially.