Man Group to sell brokerage arm

Stanley Fink will step down as CEO before the business is sold off

Man Group, the world's largest listed hedge fund, is to sell its brokerage business to focus on managing money.

Man said it will split into two parts, and will sell a majority stake via an initial public offering on the New York Stock Exchange later this year.

The group said its brokerage arm, Man Financial, would be renamed MF Global.

The firm's chief executive Stanley Fink, who steps down this week, built up Man Financial by buying part of bankrupt US broker Refco in 2005.

'Significant opportunities'

The disposal of the brokerage unit will allow the Man to focus on its hedge fund operation where performance fees have fallen because of worsening returns from the firm's flagship investment fund, AHL Diversified.

Analysts said that the business would be worth about $4.6bn.

"Separation will allow each business to focus even more effectively on their separate growth strategies and take advantage of the significant business development opportunities," said Peter Clarke, who will take over from Mr Fink.

The company said that it would aim to sell the shares in the business during the third quarter of this year, which runs July to the end of September.

Man Group oversees about $61bn (£31bn) of funds. Hedge funds can invest in any type of asset, often taking riskier, more profitable positions than a pension fund manager would be allowed to.

The company said that it expected pre-tax profits for the year to 31 March to be on target, with sales for the year at $15.9bn.

Shares in Man Group closed down 10 pence, or 1.8%, at 555p by the end of trade on the London Stock Exchange.