Clarke Blames Sub-Prime For Man IPO Woe

Jul 20 2007 | 8:25am ET

Man Group CEO Peter Clarke blamed fears of a credit crunch resulting from the growing sub-prime mortgage debacle for the failure of the MF Global initial public offering to achieve its sale price. But he defended his decision to go forward with the sale in spite of the unfavorable conditions.

“The strategy was more important than the last dollar on the share price,” he told The Times of London.

“The exit multiple of 23 times underlying earnings is a compelling price for a separation,” he argued in a separate interview with Reuters. “It's the best price for shareholders in this environment.”

MF Global, Man’s futures brokerage, raised $2.9 billion in a float on the New York Stock Exchange yesterday. Man priced the shares at $30 each, well below its projected range of $36 to $39. In their first day of trading, MF Global shares dropped a further 8%.

Clarke said growing fears about the sub-prime mortgage market were to blame.

“What you have seen since [four weeks ago], particularly in the U.S., is concerns that started in the sub-prime mortgage market expanding across financial institutions,” he told The Times. “We were trying to sell into an environment of weakness. The timing might have been better—a week earlier, two weeks later—but the reason for floating was strategic, not financial.”

Man still owns 20% of MF Global, but Clarke said the firm would sell the remaining stake “over time.”

In Depth

The Importance of Stability in the Evolving Hedge Fund Administration Market

Oct 5 2015 | 8:17pm ET

Hedge fund administration has evolved from simple record keeping to an integral,...


Citadel Supports Manhattan Real Estate With Record Deal

Sep 16 2015 | 3:04pm ET

Never count hedge funds out of a big property deal. The Manhattan real estate market...

Guest Contributor

Hedge Fund Marketing To Independent RIA Firms

Sep 30 2015 | 1:56pm ET

In this contributed article, Bruce Frumerman of Frumerman & Nemeth Inc. explains...


Editor's Note

Upcoming Events