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

Q&A: Executive Recruiter Talks Hedge Fund Closures, Hiring Trends

Dec 19 2014 | 6:58am ET

This year, hedge funds have been closing at a rate not seen since the financial...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Alternative Investment Funds Face A Communications Imperative

Dec 19 2014 | 6:10am ET

A handful of the top alternative investment firms on both sides of the Atlantic...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.