Man Group employees feel the squeeze at Riverbank House in London; In mid-2008, Man Group had a market cap of $20bn. Today it is $2.5bn. The world’s second-largest hedge fund company has seen its assets under management fall from a peak of almost $80bn in 2008 to $52.5bn

November 20, 2013 7:25 am

Man Group employees feel the squeeze at Riverbank House in London

By Chris Newlands

Man Group employees are feeling the squeeze at the struggling hedge fund, with staff at its London headquarters being shunted into just one-and-a-half floors of the nine-story building it opened to great fanfare in 2011. One senior executive based at the HQ on the banks of the Thames said: “We are being shoved into a much smaller area, which people aren’t really happy about it. Our fund assets are shrinking and so it seems is our floor space.”The world’s second-largest hedge fund company has seen its assets under management fall from a peak of almost $80bn in 2008 to $52.5bn, while some 700 employees have left since Man Group merged with rival GLG Partners in 2010.

Although the hedge fund company signed a 20-year lease on Riverbank House in 2011, it never moved in to all nine floors and instead sublet space to Royal Bank of Canada. The intention, however, was to occupy all floors as the company expanded.

The squeeze comes as Wall Street hedge fund SAC Capital announced it was to close its London office overlooking St Paul’s Cathedral after pleading guilty to insider trading charges in the US.

Brevan Howard, the world’s third-largest hedge fund, also now only has a handful of traders left at its London office in Baker Street after moving most of its operations out of the UK to escape European Union regulation and grow internationally.

Man Group, however, said its move was not the result of any further cost-cutting measures than those already communicated. “Previously announced cost savings programmes remain on track,” the company said.

In July last year Man Group detailed plans to make $100m of cost savings over the following 18 months. That was on top of $95m of cuts announced four months earlier.

The company added: “In August, we entered into a contract to sublet a significant portion of our existing office space in Riverbank House, our main London office and headquarters. This will result in a restructuring charge of approximately $60m.

“The move had already been communicated internally to staff, but the shift is taking place now and that could be why you’re hearing a few grumbles.”

It is understood the latest move to sublet additional floor space will see law firm Field Fisher Waterhouse occupy three floors at Riverbank House.

The head of corporate real estate strategy for a large London-based US bank, who is responsible for working out how much space the bank needs, said such downsizing of floor space is becoming very common. “It’s definitely accelerating,” he said. “Jones Lang LaSalle recently did some research showing that the area per employee has halved in the past 10 years.”

In mid-2008, Man Group had a market cap of $20bn. Today it is $2.5bn.