Man's acquisition of GLG
On 17 May this year, we announced our proposed acquisition of GLG. GLG is a leading global multi-strategy investment manager with around $24 billion in FUM and a low style correlation to managed futures. The transaction would position Man as the industry leader in liquid, alternative investment strategies with FUM of $63 billion.
We believe the transaction is compelling for our fund investors, for our employees and for our shareholders. For our investors, the combination will provide comprehensive and compelling investment solutions worldwide, providing the acumen and flexibility investors are seeking in today's rapidly changing markets. For employees, we believe the combined firm will be a magnet for industry talent, with investment teams benefitting from more diverse sources of client assets and distribution teams able to bring broader offerings to market. Shareholders will access strategic and commercial benefits through
- The combination of two established investment management businesses with complementary investment strategies and the integration of their sales, structuring and operations teams
- A complementary geography of distribution franchises and fund investors, offering the opportunity to market products into new markets and to new groups of investors
- The potential of the enlarged group to add significant incremental funds under management through combining GLG's investment offering with Man's structuring and distribution expertise
- The low correlation of performance between the quantitative investment style of Man and the discretionary investment style of GLG, creating new high margin products for distribution and providing greater stability in performance fee prospects
- A combined product offering, with an emphasis on liquid strategies, well positioned to benefit from the expected continued growth in onshore products globally
- The subsequent organic build out of discretionary investment strategies by the combined business
GLG's three principals – Noam Gottesman, Pierre Lagrange and Emmanuel Roman – will receive substantially all their consideration in Man shares and they have undertaken, for a number of years, to hold these shares and to continue to be substantial investors in GLG funds, underscoring their confidence and commitment in the combined firm.
Man has identified annual potential cost savings of approximately $50 million, with one third expected to be achieved in the financial year ending in 2011 and the balance expected in the first six months of the financial year ending in 2012. As stated in the announcement dated 17 May 2010, the acquisition is expected to be earnings accretive in the financial year ending in 2012 and earnings neutral in the financial year ending in 2011.
The transaction will require the approval of Man and GLG shareholders and is subject to the usual regulatory approvals. We are targeting formal completion of the transaction by the end of September of this year.
Further details of the transaction and on GLG are set out in the press release dated 17 May 2010 and the related presentation on the Man Group website. Man shareholders will, in due course, receive a circular inviting them to a meeting to approve the transaction.
