Institutional Investor's Alpha Magazine - July/August 2008 - (Page 22)

Uwe Eberle fact, are at the heart of Man: Its main hedge fund, AHL, is a quantitative managed-futures vehicle with $24.7 billion in assets. And Eberle’s return to New York comes at a time when commodity prices have soared. “Uwe was a natural choice for that post,” says Robin Bowie, chairman of London hedge fund consulting ﬁrm Dexion Capital, noting that Eberle had developed the commodities segment of RMF, Man’s fund-of-funds group for institutional investors. That job introduced him to many U.S. managers. “So he already had a wide network of contacts, which provided him with the springboard he needed,” says Bowie, adding that Eberle’s persona lit y has helped too. “U.S. investors like his openness.” Man Group traces its roots to 1783, when James Man set up business as a London sugar broker on the River Thames, where the ﬁrm is headquartered today. Man listed on the London Stock Exchange in 1994, and its share price has in— UWE EBERLE, CEO, creased tenfold in the past MAN INVESTMENTS, USA decade, holding up at about 600 pence ($12) a share during the recent market turmoil, better than many rivals. Part of that comes down to performance: AHL, thanks mainly to its large commodities exposure, had a 12-month return through March 31 of 41.3 percent. Eberle grew up in rural southwest Germany during the 1970s, when fuel shortages led the government to ban cars one day a month. “On a Sunday we would be walking to the next town,” recalls Eberle, who hasn’t forgotten that era of inﬂated commodity prices. In fact, he says he’s been thinking more about the ’70s as oil prices climb amid growing demand for rice, wheat and other essential commodities. He cautions that this is a time to worry about capital preservation rather than expect dougle-digit returns. Eberle got his start in ﬁnance in 1987, trading equity options in Frankfurt for Germany’s Bank Vereinsbank, moving into research and marketing for the bank in New York ﬁve years later. His clients included some of the bestknown hedge funds, giving him a window on the ﬂedgling industry. In 2000 he joined RMF, which was then an independent fund of hedge funds. By the time Man purchased RMF in 2002, Eberle was overseeing its thennew alternative-investment unit, specializing in developing innovative fund-of-funds products with an emphasis on commodities, power, energy and natural resources. Man’s ﬁrst foray into the U.S. was a joint venture in 1994 with Chicago-based fund-of-funds manager Glenwood Capital Investments; it acquired all of Glenwood, which ran $1.4 billion at the time, in 2000. Today, Glenwood has $6.3 billion in assets. Despite this growth, Glenwood has been something short of a success story, especially in terms of institutional investors, since Man bought it. Personnel turnover and disappointing performance followed the acquisition. Glenwood’s five-year annualized return through March 31 is only 5 percent (compared with RMF’s 8.2 percent). “Glenwood has underperformed,” says Daniel Celeghin, a director with management consulting ﬁrm Casey, Quirk & Associates in Darien, Connecticut, which specializes in advising hedge funds and investment management ﬁrms. But Celeghin says big factors favor Man’s renewed push into the U.S. “When I think about the future of the asset management industry, Man is very well positioned,” he says. Chief among its strengths is its deep expertise in commodities, he notes, adding that Man seems to be beneﬁting from investors’ ﬂight to what they perceive as the relative safety and stability of big hedge fund ﬁrms. Indeed, Man Group has been trying to put its considerable balance sheet to use in the U.S. by diversifying its offerings. Since the beginning of the year, the ﬁrm has taken a 50 percent stake in New York–based $3 billion distressed-debt specialist Ore Hill Partners and a 25 percent stake in Bermuda-based Nephila Capital, a $2.4 billion alternative-investment ﬁrm specializing in bonds and credit derivatives tied to catastrophe risk. Last year Man took a majority position in MTM Capital Partners, a Londonbased start-up in the alternative energy sector that runs the China methane project and is trying to raise a $1.5 billion fund for opportunities related to climate change, especially environmentally conscious energy projects. Eberle has touted Man’s expertise in commodities as well as its history of investing in the growing environmental sector. With more opportunity, of course, comes more pressure. Eberle recently sat down with Alpha Staff Writer Imogen Rose-Smith in his Rockefeller Center ofﬁce to discuss the alternative-investment environment and the future of Man in the U.S. Alpha: Why has it taken Man so long to better establish itself in the U.S.? Uwe Eberle: Part of the reason is we were focused on “We are now getting to a place where the world needs to be much more focused on the environmental issues on a much more permanent basis.” building the business elsewhere. But we started going into the U.S. on the private client distribution side in 2001. By 2003 we were starting to go into the market with Glenwood. But it was a difﬁcult time to be raising money for that ﬁrm. Glenwood was running very-low-volatility funds and the market’s appetite for risk was far higher, so it was difﬁcult to gain traction. But Glenwood has since modiﬁed its portfolio, and the ﬁrm is doing extremely well. What about AHL? When we started focusing on AHL in 2005, no one in the U.S. had much interest in the managed-futures business. Even with RMF, ﬁrst we had to integrate RMF into Man Investments, and it just took time. 22 • INSTITUTIONAL INVESTOR’S ALPHA • JULY/AUGUST 2008

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - July/August 2008

Institutional Investor's Alpha Magazine - July/August 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Mr. Big Goes Small The Good Guys: Adopt This School! Interview: Man's Great Hope Cover Story: The Gentleman Activist Strategies: The New Bankers Profile: Staying Alive Research Center: The Best of the East The Asian Sensations Alpha Bytes: Into the Light Unhedged: Commentary: Speculating on Washington

Institutional Investor's Alpha Magazine - July/August 2008

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