Man Group Plc (EMG), the world’s largest publicly traded hedge-fund manager, jumped as much as 8.7 percent after regulators cut the amount of capital it must hold by $250 million.
The shares traded at 104.8 pence at 8:12 a.m. in London, up 7.3 percent, marking a three-day gain of 18 percent and its best in four years. They have increased 27 percent this year, giving the company a market value of 1.9 billion pounds ($2.9 billion).
Under a new regulatory status confirmed by the Financial Conduct Authority, Man Group will move to be a limited licence group instead of a full-scope group, the London-based company said in a statement today. Man Group submitted a revised Internal Capital Adequacy Assessment Process document to the FCA, which found that the firm no longer has to hold as much capital.
“This reduction has been possible primarily in light of the less balance sheet intensive nature of the company’s activities relative to earlier years,” Man Group said in the statement. “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.”
Man Group shares have been under pressure since Sept. 27, 2011, when the firm announced clients had begun pulling money amid losses at its biggest hedge fund, AHL Diversified. The board said on March 18 that “deteriorated company performance” was reflected by a 20 percent drop in assets under management to $55 billion since the end of 2011.
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