In March 2009 Man announced the launch of Man Multi-Manager – an integrated hedge fund management business with a strengthened investment proposition.
Man Multi-Manager was designed to fulfil two clear strategic objectives.
- To launch an integrated investment management business, combining the strengths of Man's three multi-strategy operations – Glenwood, MGS and RMF.
- To expand Man's managed account (MAC) platform and make this core component of Man's product offering available to a wider range of private and institutional investors.
By July 2009 the integrated business had become operational, with a new organisational structure and enhanced investment process in place to meet the evolving requirements of our investors.
In October, Fitch Ratings assigned Man's Multi-Manager business an 'M2+' rating, the highest ranking achieved by a fund of hedge fund group.
Man Multi-Manager has attracted significant interest from investors and has a growing pipeline of new mandates. In our last financial quarter, we secured around $1.5 billion of new mandate wins.
Investment strategy
Man Multi-Manager is founded on the core proposition that long-term investment success comes from achieving the right balance between uncovering opportunities and managing risk. We seek to add value through the full market cycle, relying on the deep experience of our senior investment professionals, asset allocation, bottom-up research, and active portfolio management. Our aim is to provide investors with attractive long-term, risk-adjusted returns, achieved through controlled risk-taking across multiple portfolio dimensions, with a focus on downside deviation. Our investment philosophy combines a structured, process-driven approach with qualitative judgement and agility, counterbalanced by various risk controls and quantitative analysis.
The Multi-Manager business has one of the largest hedge fund research teams in the industry with analysts averaging 13 years of investment experience based in Chicago, London, New York, Singapore and Switzerland. The selection process is supported by a proprietary software application which serves as a central information repository to create a structured, consistent approach across all research stages. Drawing on a broad network of industry contacts, the hedge fund research team identifies high-calibre managers with the ability to generate alpha on a consistent basis. The team establishes contact with about 300-400 managers each year as part of their new manager sourcing efforts, and maintains an approved list of over 150 managers, around half of which are allocated through managed accounts.
Managed accounts
For more than 12 years, Man has built its managed account capabilities as an investor. This is a key differentiator to the flow-driven business of competing providers.
MACs are a separate legal entity, owned by the investor, in which the hedge fund manager's involvement is restricted to the role of investment advisor, with third party service providers performing the operational and custodial duties. In addition to greater control of assets and transparency, MACs enable investment policy and risk guidelines to be framed to meet the needs of individual investors. Furthermore, enhanced terms of engagement may include preferential liquidity, authority limits and special termination clauses relative to the 'master' fund on which the MAC is based. Consequently, there are numerous benefits to institutional investors in choosing a partner with deeply established MAC capabilities.
Man uses MACs as part of our broader investment strategy, only investing with managers where the strategy and terms will contribute positively to Man's overall portfolio management capabilities. Man's strong investment brand and global scale provide significant competitive advantage when negotiating for scarce MAC capacity. During the course of the 2009/10 financial year the Multi-Manager business launched 28 new MACs and by March 2010 had over $7 billion run across 74 accounts.
Man's managed account offering is
- Investment led: resulting in high quality of approved managers and low levels of tracking error
- Independent: allowing best in class third party service providers to be selected by Man's operational and risk specialists
- Scaleable: the resources available across Man allow investors a full breadth of investment strategy and access choice
The successful expansion of Man's MAC capabilities as part of an integrated Multi-Manager business has allowed us to deliver investment solutions with transparent access to a broader range of private and institutional investors.
