Tuesday 30 December 2008

Man Group closes ‘eco’ business

www.environmental-finance.com/onlinews
London, 18 December:

Hedge fund giant Man Group is winding down its Man Eco operation in a move that a source close to the company describes as a reorganisation - but which will raise concerns about how environmental investment is set to weather the financial crisis. The approximately 10 staff in the unit will be redeployed within the firm, if possible, the source said, and some $600 million of assets held by funds within the Man Eco operation will be retained by the company, and transferred to another part of the business.

The move is part of a restructuring at the London-listed firm, which had $61 billion under management as of November, to remove a layer of management between the Man Investment holding company and the underlying investments. Its five "core investment managers" - of which Man Eco was one - are being reduced to three.

The $600 million comprises a 25% stake in Nephila Capital, a catastrophe and weather risk specialist investment manager, for which Man paid $50 million in June, and a majority stake in MTM Capital Partners, which manages a $600 million carbon fund specialising in methane capture.

The assets will be transferred to RMF's New Alternatives group, another Man Group investment manager, which specialises in environmental investing, and which manages an environmental fund-of-funds. The source stressed that the Man Group was still interested in the environmental investment sector, but the move was in the context "of people generally reassessing risk" and costs in the hedge fund sector.

Stanley Fink, the former head of the Man Group and an advocate of environmental finance, recently backed a new sustainable investment venture, Earth Capital Partners. That company, launched earlier this month, includes at least one Man Eco alumnus, Coen Weddepohl, the former head of Man Group's environmental finance business. The Man Group declined to comment.

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