Man Group Raises $500 Million for Hedge Fund Run by CIO Rattray

(Bloomberg) -- Man Group Plc’s chief investment officer Sandy Rattray is running money once again -- and this time he has a 237-year reputation to protect.

The firm has started a hedge fund managed by London-based Rattray and named it Man Group 1783 after the year the firm was founded, according to a person with knowledge of the matter. The fund began trading this week with about $500 million, the person said, asking not to be identified because the information is private.

A spokeswoman for the world’s biggest publicly-listed hedge fund firm declined to comment.

The initial capital raising success reflects advantages that some of the largest hedge funds command in a difficult environment, as investors bail out from the industry. Only a handful of firms are able to launch with $500 million or more. Over 4,000 hedge funds have shuttered over the past five years, while almost $98 billion was pulled from the industry in 2019.

As CIO, Rattray has oversight across all of Man Group’s funds run by dozens of portfolio managers. But he is starting to manage money directly after a gap of about three years.

Many of Man Group’s existing hedge funds, such as AHL Evolution, are closed to new money. However, they still run sub-strategies that have room to take in more capital. Rattray’s fund uses a computer-driven model to invest in those underutilized capacities across its quantitative and discretionary divisions.

The 1783 fund’s initial capital has mostly come from U.S. investors and could manage as much as $2 billion.

Man Group was founded in 1783 by James Man as a barrel maker-cum-brokerage on Harp Lane, about 500 meters from its current office along the Thames in London. Over the next two centuries, it supplied rum to the Royal Navy and traded commodities such as coffee and sugar before eventually focusing exclusively on financial services.

In 1989, Man Group began acquiring a computer-driven trading shop called AHL and later acquired discretionary investment unit GLG.

The firm managed $112.7 billion at the end of September.

©2020 Bloomberg L.P.

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