Man Status Change Nets US$550M, AHL Gets New Structure

Apr 12 2013 | 12:46pm ET

A change in regulatory status at the Man Group has freed up US$550 million as the world's largest publicly-listed hedge fund manager restructures its flagship strategy.

The new Financial Conduct Authority proposed moving Man into a lower risk classification. The change comes because Man has become "less balance-sheet intensive" in recent years and no longer requires a US$300 million mandatory capital planning buffer. Man will also be able to add US$250 million to its cash reserves due to lower capital requirements.

The FCA is expected to finalize the reclassification in the third quarter.

Man has also created a new subsidiary to house its flagship AHL strategy. AHL Partners was incorporated last month to house the strategy's staff, Financial News reports. The new structure makes AHL a partnership more like Man's GLG Partners unit and will serve as "a way of retaining and incentivizing our most senior staff at AHL going forward," AHL CEO Sandy Rattray said. "It is designed to make us more competitive."

The AHL restructuring follows a restructuring of Man itself last year, designed to increase the firm's access to distributable reserves.

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