Thursday, 26 November 2015
Last updated 15 hours ago
Mar 27 2014 | 11:55am ET
Citigroup expects Man Group CEO Emmanuel Roman to turn things around at the struggling hedge fund giant, but not for a while.
The bank put a “sell” recommendation on Man stock yesterday, warning that underlying profit is unlikely to grow until 2016. Citi cited Man’s increasing reliance on its GLG unit—and GLG’s reliance on a highly-paid staff.
GLG employees earn between 50% and 60% of the unit’s revenue, Citi said, twice that taken home by employees of other Man units. Overall, 42% of Man’s net revenue went to paying staff in 2013.
“We see potential at Man,” Citi said. “but believe the shares already price in a recovery that is two to three years away.”
Citi is not impressed with the potential impact of Roman’s cost-cutting program, warning that the cuts made so far have already been eliminated by the strength of the U.S. dollar, and that further cuts won’t make much difference unless its assets under management shrink precipitously.
The bank estimates that Man will miss its 2015 earnings estimate by nearly one-third.
Oct 21 2015 | 10:41am ET
One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…