Times Online – Hedge funds are supposed to like risk and to love leverage. However, in the current markets, it has all got too much for Man Group.
The world’s biggest quoted hedge fund manager – and historically one of the most successful – shocked investors yesterday by announcing plans to unwind all the leverage in its $8.6 billion (£5.5 billion) Man Global Strategies fund. It also surprised shareholders by a sharper than expected fall in assets under management which slipped to $67.6 billion, compared with a forecast $70.3 billion.
That was enough to knock almost a third off its share price.
Many hedge funds are being forced to cut leverage by their lenders, but in Man’s case the move is voluntary. Because markets are so difficult, it has decided to pay back its lenders and put MGS’s holdings in cash.
