18 July 2011
The total consideration for the transactions is $355 million, payable in cash. In return, Man will be entitled to benefit from, or bear the risk of, any change to the net asset value of the claims, with the funds sharing upside in limited circumstances. Man will be entitled to the proceeds of each claim as and when it is distributed by the relevant Lehman estate, although the precise timing of receipts is difficult to determine given the complexity of the Lehman insolvencies.
The board directors of the relevant funds have received independent financial and legal advice in respect of the transactions.
In its 7 July Interim Management Statement, Man confirmed that it had a regulatory capital surplus of around $900 million, net cash of around $900 million and total available liquidity resources of around $4.8 billion. The regulatory capital impact of the transactions is expected to be around $50 million and they are expected to have a negligible impact on Man's net interest expense.
Peter Clarke, Chief Executive of Man, said: “These transactions will remove the remaining uncertainty from funds with residual claims against the Lehman estates, to the benefit of both existing and new investors. In this way, Man can use its resources productively to provide clarity for fund investors and the opportunity to grow assets in the affected funds more quickly."