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Man Group plc announces certain changes with respect to its regulatory capital position
11 April 2013
Man Group has confirmed with the Financial Conduct Authority ("FCA") the change of its regulatory status from being a Full Scope Group to a Limited Licence Group.
As mentioned at our 2012 results presentation, the Group held a Capital Planning Buffer of approximately $300 million which it is no longer required to hold by the FCA.
Furthermore, in light of the Group's change in status to a Limited Licence Group it has submitted a revised Internal Capital Adequacy Assessment Process ("ICAAP") document to the FCA. The ICAAP is part of the mechanism through which regulated firms are set capital requirements by the FCA. Consistent with the Group's revised status, Man Group's capital requirement is today approximately $250 million lower. This reduction has been possible primarily in light of the less balance sheet intensive nature of the company's activities relative to earlier years, for example with respect to fund seeding activities and the scale of the guaranteed products business. However, the ICAAP submission remains subject to review by the FCA, which is expected in the third quarter of 2013 and could result in higher or lower capital requirements in the future.
As disclosed in the 2012 year end results, Man Group's pro forma surplus capital in excess of the Capital Planning Buffer as at 1st January 2014 is $370 million, after taking into account the payment of the full year dividend in respect of 2012, which remains subject to shareholder approval, and the expected impact of the Capital Requirements Directive IV. As described above, this figure is increased by $300 million due to the removal of the Capital Planning Buffer, and a further $250 million given reduced capital requirements as a Limited Licence Group. Pro forma for these changes therefore, Man Group would have surplus capital of up to approximately $920 million as at 1st January 2014, an increase of up to $550 million.
The Board of Man Group will continue to assess the appropriate level of capital required to operate the business from time to time and the potential uses of any surplus capital, and will provide further detail in due course in connection with future results announcements.
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Man is a world-leading alternative investment management business. It has expertise in a wide range of liquid investment styles including managed futures, equity, credit and convertibles, emerging markets, global macro and multi-manager, combined with powerful product structuring, distribution and client service capabilities. As at 31 December 2012, Man managed $57.0 billion.
The original business was founded in 1783. Today, Man is listed on the London Stock Exchange and is a member of the FTSE 250 Index with a market capitalisation of around £1.8 billion.
Man is a signatory to the United Nations Principles for Responsible Investment (PRI). Man also supports many awards, charities and initiatives around the world, including sponsoring the Man Booker literary prizes. Further information can be found at www.man.com.
Forward looking statements and other important information
This announcement is issued on behalf of both Man Group plc and Man Strategic Holdings Limited. This document contains forward-looking statements with respect to the financial condition, results and business of Man Group plc. By their nature, forward-looking statements involve risk and uncertainty and there may be subsequent variations to estimates. Man Group plc's actual future results may differ materially from the results expressed or implied in these forward-looking statements.
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