When U.K. Chancellor of the Exchequer George Osborne officially opened Man Group’s new City of London office in July 2011, not long after cutting the ribbon at a similar ceremony for Japanese bank Nomura, he joked, “When I did this at Nomura, the whole thing almost fell down.” Happily, both buildings still stand, but, less happily, both firms are now in crisis. Man’s CEO for the past five years, Peter Clarke, said on December 10 that he will be stepping down in February after more than a year of capital outflows and disappointing performance. It’s not clear, however, how CEO-designate Emmanuel (Manny) Roman, the president and COO, can turn things around.

“A change of leadership is unlikely to have a material, near-term impact in itself,” says Peter Lenardos, a financial services analyst at RBC Capital Markets in London. “Man needs to continue to focus on fund performance, gathering assets and ensuring that its funds are fairly priced from a competitive point of view.”

Man faces stinging criticism from investors and analysts after suffering net capital outflows for five successive quarters. “The board has been asleep,” says one investor. Man's total assets under management stood at $60 billion on September 30, down from the $71 billion they reached following the completion of the company's $1.6 billion acquisition of GLG Partners in October 2010 — a deal that Clarke hoped would be transformational. That decline took place despite the acquisition in July 2012 of FRM, a fund-of-hedge-funds firm with $8 billion under management. The group’s share price, meanwhile, was a mere 80.6 pence ($1.30) on December 12, down about 70 percent since the GLG merger.

It’s been a difficult year for many hedge fund firms, of course. But, Lenardos says, “there are other listed alternative asset managers that have performed better than Man’s share price, so the problems that Man is encountering appear to be company-specific.” 

Two years ago, GLG — with its fundamentally driven investment approach and avowed “star culture” — seemed an attractive acquisition target for Man Group, which relied heavily on its computer-driven, trend-following AHL unit. The deal has yet to deliver on its promise, says David McCann, a financial services analyst at Numis Securities in London. “AHL is far too dominant a part of the group,” he explains. “Man doesn’t disclose the exact figures, but my research shows it accounts for more than 70 percent of the group’s profits.”