Man Group plc - Annual Report 2007

“Our people are our key asset. Attracting the best talent, motivating them to excel, retaining them and ensuring that they progress in their careers is a key focus of senior management across the Group.”

The proposed separation of our Brokerage business is confirmation of the Group’s success in developing market leading businesses and its focus on building shareholder value. The separation also provides a unique opportunity for the Group to restate its long-term business strategy. The Man Group has a tremendous history of performance, for our fund investors, our shareholders and other stakeholders. Our continued focus is on driving forward this success on a balanced and sustainable basis to generate continued growth, address changing markets and create further shareholder value. The core components of our business model to achieve these objectives are:

• People
• Product innovation
• Distribution network
• Investor services
• Governance and risk management
• Performance

Our people are our key asset. Attracting the best talent, motivating them to excel, retaining them and ensuring that they progress in their careers is a key focus of senior management across the Group. Man’s long established presence in alternative investments has enabled us to assemble a broad and deep range of talented people, with focus and experience. This year we launched a well received global staff survey to capture the thoughts and motivations of all our people and to develop opportunities for personal advancement and career progression within Man.

Our colleagues in the business have a direct impact on fund performance for our investors and a motivation and focus to create high quality products for investment. Their direct contribution to shareholder value is given focus through the Group’s share programmes which actively promote share ownership across the business.

Product innovation allows us to develop an extensive and flexible range of investment products to meet the risk, return, liquidity and other requirements of our investors worldwide. We have developed a successful business model that utilises our ownership or preferred access to a wide range of portfolio managers specialising in alternative investment strategies, to offer investment performance with a low correlation to bond and equity benchmarks. This is combined with our portfolio construction capabilities and specialist structuring expertise to tailor products which meet investor demands, local regulatory requirements or tax treatment. This set of skills continues to be an important driver in our ability to maintain margins and extend the maturity profile of our funds under management, creating significant shareholder value.

Product innovation is a constant process. Through our relationships with distributors and direct dialogue with institutional investors, we understand prevailing investor preferences for risk and return, and can develop new products which meet these expectations. We provide a broad range of guaranteed and open-ended products across a large number of territories. Our long track record of investment performance and our focus on quantitative analysis allow us to select investment strategies and model product returns with high levels of confidence in expected performance over the long-term. We use our own capital in the search for new sources of return with low correlation to equity and bond benchmarks, seeding new managers, products and styles. Recently we have made proprietary investments in climate impact or environmental projects as part of the process of establishing performance track records for environmental investment products for investors.

The attraction of our investment products has fuelled strong demand and high levels of sales. To accommodate these strong asset inflows, we have focused on building out the range and capacity of specialist managers to whom client assets can be allocated. Our strategy is to use our long established reputation in the market to attract experienced investment managers, and the Group’s strong capital position to acquire, seed and develop managers and products to grow our investment capacity. This ensures that we have the widest array of investment styles, with proven performance track records, available for our institutional investors and distributors.

Our distribution network is supported by the long-term relationships our sales force has with our distributors and our institutional investors. Our distributor network covers a wide range of the largest global and strongest regional financial institutions, who sell our product to their clients for a fee. The continued trend towards ‘open architecture’, where financial institutions market products from a variety of sources, has provided us with enhanced investor access. Our focus in alternatives means that we do not generally compete with our distributors, allowing us to develop long-standing and closer relationships. This worldwide distributor network offers us scale, flexibility and efficiency in the distribution of our products.

Our strategy is to continue to grow the number of distributors and to focus on those distributors with strong franchises, high standards and an international presence. We also ensure that we take advantage of regional opportunities with local partners to broaden our network. An expanding network of regional sales offices around the world is responsible for servicing new markets and maintaining and expanding our distributor relationships.

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