Monday will be the first opportunity for the three principals of hedge fund GLG Partners, who swapped their stakes in GLG for shares in Man Group Plc (LON:EMG) on October 14 2010, to dispose of their holdings, if they choose. With the expiration of the first lock-up agreement, the trio will be allowed to sell of up to a third of their shares.
Pierre Lagrange, Emmanuel Roman and Noam Gottesman are sitting on a $220 million paper loss from two years ago, since their firm’s acquisition by Man Group Plc (LON:EMG) in the industry’s biggest merger. Man shares had tumbled from 264p when the merger closed two years ago, to 90p on Friday, having traded as low as 60p over the summer.
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Mr. Lagrange and Mr. Roman did not have any plans to dispose of their shares, as they even were unaware of the lock-up expiration of their holdings, sources close to them revealed. Mr Gottesman has stepped back from any management role in the group and could not be reached directly for comment. Mr. Roman has recently been appointed as president and holds considerable influence as chief operating officer, while Mr. Lagrange oversees GLG’s investments, and has recently been appointed as chairman of Asian operations. Mr. Lagrange, the company’s third-largest shareholder, owns 69 million Man shares, directly or through trusts, while Mr. Gottesman owns 41.9 million, and Mr. Roman owns 19.5 million.
The $1.6 billion takeover of GLG by Man was termed as a “transformative” step that would stabilize the combined entity and stem investor outflows. However, the ongoing European economic crisis has dented the investor confidence and performance for the company’s funds, which in turn has adversely affected the profits and weakened Man’s pitch to GLG shareholders that the combined business would be worth more than the standalone.
Since earlier this year, Man Group Plc (LON:EMG) has been trying to restructure its business amid mounting concerns from institutional shareholders. The company has introduced measures to improve transparency around earnings, including a move to drop a progressive dividend policy in May. Man is also planning to restructure its listed status, and appointed Jonathan Sorrell, son of Martin Sorrell, chief of WPP, as a new finance director. In hopes to increase the inflow, company has also introduced new products. For the upcoming interim management statement, due Thursday, analysts expect continued outflows from the group, despite the acquisition of fund of funds, FRM, last quarter. The company’s assets under management stood at $52.7bn at the end of June.