Thursday, 24 July 2014
Last updated 8 hours ago
Jul 18 2011 | 8:09am ET
The Man Group is making some investors in its GLG funds very happy, spending $355 million to acquire the funds’ “residual exposure to the Lehman estates.”
Man said in a statement the transactions are mainly relevant to GLG’s European Long Short and North American Opportunity strategies and are payable in cash. Thirty GLG funds with collective AUM of $2.8 billion had exposure to Lehman.
As a result of the deal, says the statement, Man will bear the risk of any change to the net asset value of the claims with the funds “sharing upside in limited circumstances.”
Legal efforts to resolve issues stemming from Lehman’s 2008 collapse are still playing out in the courts. When matters are settled, Man could benefit, if the payout is greater than the $355 million current asset value of the exposures.
The Wall Street Journal, citing someone “familiar with the matter,” said Man expects a settlement within about three years.
Man will use some of the $900 million surplus on its books for the transaction and says the regulatory capital impact of the transactions will be around $50 million.
Said Man Chief Executive Peter Clarke: “These transactions will remove the remaining uncertainty from funds with residual claims against the Lehman estates, to the benefit of both existing and new investors. In this way, Man can use its resources productively to provide clarity for fund investors and the opportunity to grow assets in the affected funds more quickly.”
Analysts say the move will make it easier for Man to market the GLG funds to new investors.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…