Hedge Fund Group Man Sells Portfolio of Lehman Brothers Claims at 32% premium

Hedge fund group Man has rid itself of its residual exposure to the collapsed US investment bank Lehman Brothers.

The company has sold a portfolio of legal claims to the Lehmans estate to Hutchison Investors for $456m, with Man in line for another $5m depending if the amount recovered passes certain thresholds. The claims were acquired in July 2011 from funds managed by its GLG subsidiary for $355m and were valued at $346m in June, so the sale price represents a hefty premium

The proceeds will be used to increase Man's regulatory capital surplus and lift its cash position.

The company has bee struggling recently as clients withdraw their cash after poor performances, particularly from Man's flagship AHL fund. It has slashed costs and named Jonathan Sorrell, the son of the boss of advertising group WPP, as its finance director.

But it still lost its place in the FTSE 100 index, and on Thursday its shares were hit on reports it would be deleted from the MSCI global standard indices this month, which are used by tracker funds and other investors. Analysts at Societe Generale estimated selling pressure on Man of 86.5m shares, according to Reuters, equivalent to 5.5 days trading volume.

This article was written by Nick Fletcher, for guardian.co.uk on Friday 16th November 2012 11.55 Europe/London