Odey Asset Management, an investment firm founded by Crispin Odey, purchased a 5 percent stake in Man Group (LON:EMG) for £75 million.
Warren Buffett: If You Own A Good Business, Keep It
Buying private businesses is easier than acquiring public firms, and investors should avoid selling good investments at all costs, according to the Oracle of Omaha, Warren Buffett. Q2 2020 hedge fund letters, conferences and more In an interview with CNBC in March 2013, Buffett was asked if he was looking at any businesses, in particular, Read More
The stock value of Man Group Plc (LON:EMG) surged by 1.80 GBp, or 2.25 percent, from its previous close at 80.05 GBp per share to 81.85 GBP per share on Friday at the London Stock Exchange.
Speculations floated that Crispin Odey will continue to acquire additional stakes in Man Group, and he will eventually form a consortium to submit a proposal to acquire full control of the struggling hedge fund giant.
Reports regarding Odey Asset Management’s interest in purchasing Man Group Plc (LON:EMG) came out, after analysts at Numis initiated a “sell” rating on the company stock and declared that it is “un-investable” earlier this month. The analysts said, “We believe it will become increasingly difficult to sell AHL to new investors, and retain existing ones as the poor numbers start to impact the medium and long-term record.” Numis also cited that Man Group charges higher fees than its competitors with better performance records.
Jonathan Gosling, financial analyst at Edison Investment Research, also commented recently that Man Group’s reliance on AHL is putting increased pressure on the hedge fund’s stock price, which declined by almost 50 percent for the past year.
Earlier this month, the stock value of the company climbed by nearly 7 percent, to 90 GBp, due to reports that BlackRock Inc. (NYSE:BLK) was interested in acquiring the financially troubled hedge fund giant for £2.5 billion, or 140 GBp per share. Analysts dismissed the reports, citing that it was not strategic for BlackRock Inc. (NYSE:BLK)to acquire Man Group.
The financial performance of the London-based hedge fund giant was affected by the weak returns from AHL, its flagship fund, worth $19.5 billion. According to Bloomberg, Man Group’s assets under management declined from $71 billion to $52.7 billion in June this year. During the 52 week-range, the stock price of the company went down to as low as 61 GBp per share.
Man Group Plc (LON:EMG)’s chief operating officer previously said, “We’ve spent quite a bit of time trying to make performance better in AHL. Yes, we do trade slower, and there are many other things we’ve worked on.”
The company initiated several measures to drive revenue growth. Last month, the company hired Sudi Mariappa, former global head of portfolio management at Pimco, to help boost Man Group’s fixed income. The company also announced an effort to cut costs by $100 million per year.
By the end of September, Man Group’s Assets totalled $60 billion.