Man Group to sell brokerage arm

Man Group, the world''s largest listed hedge fund with about $61 billion of assets under management, plans to sell its brokerage business to focus on money management. It plans to split its business in to two and sell a majority stake through an initial public offering on the New York Stock Exchange in the third quarter of 2007.

The group''s brokerage arm, Man Financial, which its outgoing CEO Stanley Fink built by acquiring the bankrupt US brokerage firm Refco in 2005, would be renamed MF Global.

The disposal of the brokerage unit will allow Man to focus on its hedge fund operation where performance fees have declined because of worsening returns from the firm''s flagship investment fund, AHL Diversified.

Man says the separation would allow each business to focus better on their individual growth strategies and take advantage of the significant business development opportunities.

Hedge funds can invest in any type of asset, often taking riskier but more profitable positions than a pension fund manager would.

The company said that it expected pre-tax profits for the year to 31 March to be on target, with sales for the year at $15.9 billion.