FundForum 2012: GLG’s Roman on Lehman, fees and riding the Bengal tiger
“I made a tremendous mistake trusting Lehman in 2008,” commented Manny Roman (pictured) in a candid interview with Andrew Fisher of Towry Group. “We had some exposure to them; we should have had none. It was messy for a while. Now, every night before I go to bed I pray that my counterparties are in good shape.”
As chief executive of GLG Partners, Roman heads one of the world’s most successful hedge fund managers, the latest step in a remarkably successful career that included 18 years at Goldman Sachs, where he was co-head of worldwide global securities services before leaving for GLG in 2005.
Roman says he runs a hedge fund firm, a task likened to herding not cats but Bengal tigers, “because I love investing. You have a scorecard every day, and you’re only as good as your last set of numbers. I do it because I love to do it.”
Regarding hedge fund costs, now a more acute topic than ever, Roman says it all boils down to performance. “You need to generate 12 per cent net of fees – at GLG we’ve delivered 14.2 per cent,” he said. “Clients understand why we charge these costs and are happy with the returns – but the minute we stop delivering, they will start to question what we’re doing.”
Roman is relaxed about regulation in the UK, arguing that the FSA does a good job. That’s not necessarily true of the US: “Regulation is much looser, so something is more likely to go wrong in the US than anywhere else.”
At the moment, he admits, it’s hard to be bullish on equities. “The solution is to get through the ups and downs and deliver 10 per cent,” he said. “That’s slightly lower than my earlier figure, but right now 10 per cent is doing great.”
- Special Reports