Man Group eyes Asian institutions

By Jeffrey Hodgson

HONG KONG (Reuters) - Man Group is working to win more business from big Asian investors like pension funds and insurers even as global financial turmoil spurs some existing clients to redeem holdings and seek safety in cash.

The world's largest listed hedge fund group recently hired an institutional salesperson in South Korea because of the potential it sees there and is studying the long-term opportunity in China, said Tim Rainsford, managing director, Asia Pacific for Man Investments.

"It's certainly a challenging time. At the same time, the brakes are not on in the business. We will launch products when they're appropriate. And we will go into new markets when it's appropriate. We haven't turned the lights out," he told the Reuters Finance Summit on Monday.

Shares in Man Group fell more than 27 percent November 6 after the London-based firm reported first-half pre-tax profit fell 24 percent due to a drop in performance fees, while assets under management slid 9 percent to $67.6 billion (42.8 billion pounds).

The firm still saw net inflows in the first half as redemptions of $6 billion were offset by sales of $10.2 billion.

Rainsford, a former head of north Asian listed derivatives for JPMorgan Chase & Co (JPM.N) who joined Man in 2002, said market turmoil had been challenging, particularly as many Asian investors have a shorter-term investment timeframe and even successful products had been hit.

"They're redeeming because they want to lock in those profits and they probably need to meet margin calls elsewhere," he said.

"Investors want cash right now. They want to see the balance in their bank account. They're getting out of equities and they're moving down the liquidity curve."

But the Hong Kong-based executive said the crisis would also present opportunities longer-term for bigger, stronger hedge fund players with the balance sheet strength and resources to withstand the downturn.

WILLING TO HIRE

With that in mind, the firm was looking more closely at Asian and Australian institutional investors like pension funds, insurers and companies with spare cash to invest.

Man now sources just 10 to 15 percent of its Asia-Pacific assets from these big investors, with the bulk coming from retail investors including the wealthy clients of private banks.

"We'd certainly like to increase the size of the mix in terms of the institutional money. Our success in Asia has always been in the retail space," he said.

"But where there are institutional opportunities we'll start to try to identify that. To date, it hasn't been a focus of our business."

Man Group Chief Executive Peter Clarke told Reuters earlier this month that the firm plans to be a consolidator in the hedge fund industry in the long-term and thought the industry could see redemptions of between a third and a quarter at the year-end.