4 The Sunday Times February 6, 2022
BUSINESS
W
hen he was 44, Luke
Ellis did something
most people of that age
can only dream of. He
retired. Ellis packed up
his office life and
bought a farm in West
Sussex, rearing cattle
and growing his own
food. That was 15 years
ago — but his dream of being a gentleman
farmer was not to last.
After three years, he was lured back to
the world of hedge funds where he had
made his name — and his money — to join
Man Group, becoming chief executive
five years after that. He says he turned his
back on the farm — “it was magic ... really
good fun” — because he could see that
even more fun was to be had at Man.
A self-confessed “nerd” who can see
“patterns” in markets, Ellis was con-
vinced to return to finance by his friend
Manny Roman, who had just sold his GLG
hedge fund operation to Man.
That $1.6 billion (£1.2 billion) deal in
2010 was intended to reduce Man’s reli-
ance on a trading system called AHL,
which uses “black box” automated rules
to deal on the markets, and to make per-
formance less volatile.
But the merged business became
bureaucratic amid a culture clash
between the “quants” from Man — mathe-
matical geniuses programming the trad-
ing strategies — and the brasher, more
individualistic and hunch-driven GLG
crew, who were renowned for their out-
sized pay and egos to match.
Roman had already been using Ellis on
a consultancy basis, but once he had sold
his business to Man, he wanted his
expertise to run some of the funds inside
the wider business.
“I wasn’t interested in coming back to
work before then, but it looked like a
really interesting intellectual problem to
sort out and turn around,” Ellis says.
new management skills in the early stages
of the lockdown, when staff were work-
ing at home (some of Man’s international
employees have gone back permanently
to their roots in the Far East and parts of
continental Europe). He even introduced
Minds at Man (he wanted to call them
“nerd talks”), where staff got 30 minutes
to talk about their specialist subjects —
from quantum physics to orchid growing.
In his case, it was red wine from Bur-
gundy. Surely that is just about buying
the most expensive? Not so, he says,
because even the precise place in the
field where the grapes are grown makes a
difference. It all comes back to tracking
the data. “I love the fact that a bit like
markets — there’s loads of information,
there’s loads of noise.”
Ellis works in a world where many
practitioners have just one motivation:
money. Not at Man, though, he explains —
“[those people] don’t work here”. Yes,
the annual bonus season can be fraught,
but he is clear with staff: “I tell them, don’t
ask me for money if you can’t add value.
Don’t ask me to pay you a bonus, because
that’s where the bonus is coming from.”
Last year, Man disclosed that it had
donated Ellis’s $954,686 bonus to char-
ity. However, he says he gives away a
“large part” of what he is paid each year
without making a fuss about it. “It’s not
about being seen to do things,” he
explains. “For me, having a bigger pile of
money is not a motivator at all.”
Having fun seems to be the thing that
makes him tick. As he approaches his
59th birthday, when others might just be
starting to think about retirement, Ellis
says: “I’m trying to make the firm as suc-
cessful as possible [and] trying to be
really good at the job, because that’s how
I have fun. And I’ll keep doing it as long as
I’m having that fun.”I love the way
numbers move
in markets. My
brain naturally
sees a rhythmthat central banks will not move fast
enough to tame rising prices. “If [they]
actually tried to get rid of the excess infla-
tion, we would be in for dramas [in the
markets],” says Ellis, who remembers his
first mortgage having a rate of 21 per cent.
To some, Man will for ever be associ-
ated with Lord (Stanley) Fink, who
steered its growth through the early
2000s. Fink, 64, met Ellis on a hedge
fund version of Dragons’ Den and
describes the current boss of Man as a
“good source of stability — a balanced,
thoughtful gentleman”.
His family gave their name to a chemi-
cals business Ellis & Everard but the con-
nection ended in the 1970s and Ellis knew
from a young age that he wanted to work
in the City. He got a taste as a young child
when playing a simple game of cutting a
deck of cards with his older siblings to see
who would be first to bed, with the win-
ner getting to stay up. The contest soon
progressed to more sophisticated card
games.
“If the choice is you might get to go to
bed later than your twice-as-old brother
and sister, you could be quite hard,” he
explains.
Ellis was destined for an education at a
top public school but in fact honed his
maths skills at the local comprehensive,
Lord Williams’s in Thame, Oxfordshire.
His divorcing parents had been looking at
two different public schools and wanted
him to choose between them. Having
won a place at both, he refused, and the
prep school boy — at Dragon in Oxford —
had to learn about life quickly at the local
comp. “It was the best thing for me,” he
says. “Was it good for my academic out-
come? No. Was it good for why I can have
the career I’ve had? Yes.”
Why? Because he learnt techniques to
survive the rough and tumble, whichThe boss of Man Group is braced for ‘choppy times’ for the hedge fund, but his passion is solving problems
Inflation, interest rates, share
prices ... That’s my idea of fun
INTERVIEW
JILL TREANOR
TOM STOCKILL FOR THE SUNDAY TIMES
There had been performance issues at
the group and the deal had not solved
them. Investors withdrew their funds, the
share price crashed, Man fell out of the
FTSE 100 — it has yet to return — and chief
executive Peter Clarke left in 2012. He was
replaced by Roman, who had been chief
operating officer; Roman stayed until
2016, when Ellis took charge.
Man had started life as a sugar broker
250 years ago, before it morphed into
making financial investments. As a stock
market-listed hedge fund, it is subject to a
scrutiny to which this notoriously secre-
tive industry, one that makes billionaires
of its best players, is unaccustomed.
After Roman started the turnaround,
Ellis went on to smooth over the differen-
ces between the two sides of the business,
making cultural changes, bringing in
greater discipline in its investment strate-
gies and putting a big focus on technology.
Man employs big brains and big com-
puters — some of the smartest humans and
machines in the country. Six Man staffers,
along with 30 “hypervisors” — programs
that run networks of virtual computers —
worked on pandemic planning after scien-
tific academy the Royal Society called for
volunteers. Ellis, who describes himself as
“a good mathematician in normal com-
pany”, says he feels like “a dunce” at Man.
Perhaps. But what Ellis says he is good
at is pattern recognition. When numbers
flash red on screens as prices go down, he
is looking at the bigger picture. “What else
is going up and down? Is that random? Is
there actually a rhythm?”
“I love the way numbers move in mar-
kets,” he adds. “My brain naturally sees a
rhythm — and hopefully it sees the right
rhythm more often than the wrong [one].”
Anyone watching the Man share price
for the decade or so since that 2010 deal
might only now be starting to enjoy the
pattern. The price has recovered from its
lows below 60p, and until the rout in the
markets at the start of this year it had
almost returned to the level it was at when
the deal was announced. So far this year,
the shares are down 16 per cent, com-
pared with a 9 per cent fall in the FTSE
250, amid the turmoil caused by uncer-
tainty over inflation and interest rates.
How Man’s investment strategies —
through its computers or its people — per-
form in the months ahead will determinewhether investors keep their money in its
funds. The third-quarter results showed a
record amount of money under manage-
ment, mainly for institutions, at
$139.5 billion. Performance was by Man
AHL’s Alpha and Institutional Solutions
strategies and last year the firm said it
made $3.3 billion of gains for clients.
Ellis is braced for what he calls
“choppy times” as investors try to work
out how quickly central banks around the
world intend to raise rates, and monitor
how the banks communicate their inten-
tions to combat inflation. On Thursday,
the Bank of England raised UK rates to
0.5 per cent in the first back-to-back
monthly move since 2004, but Ellis fearsincluded teaching maths to older stu-
dents. His school days, he says, fostered
his entrepreneurial spirit.H
e started his City career at Japanese
investment bank Nomura, eventu-
ally joining JP Morgan and building
its proprietary trading business —
in essence, making bets on the
markets with the bank’s money.
After ten years, he went back to work
with a new hedge fund called Financial
Risk Management, set up by his former
boss at Nomura. With the job came a
decent-sized chunk of shares, but a dec-
ade later, in 2007, after failing to per-
suade his colleagues to sell the business,
he offloaded his stake. The windfall was
big enough to enable him to quit the City
and start his rural life. Man eventually
bought FRM in 2012.
“I’m very lucky that between being
successful at JP Morgan and choosing a
good moment to get out, and then being
successful in building a private business
and choosing a good time to get out, my
life was funded,” he says.
The pandemic required Ellis to learnLuke Ellis gave up life as a gentleman
farmer to return to the City, enticed by
the prospect of a “really interesting
intellectual problem to sort out”VITAL STATISTICS
Born: February 27, 1963
Status: married to Jenny
with three adult children
School: Lord Willliams’s,
Thame
University: Bristol
(economics and maths)
First job: data project — “a
posh version of time and
motion” — for the Bristol
Bus Company
Pay: $1.1 million salary;
$3.1 million including
bonuses
Homes: Kent and a
flat close to the
London office
Car: Range Rover — “If I
crash, it will keep me safe.”
It’s blue with a silver bear on
the bonnet
Favourite book: John
Macnab by John Buchan
Drink: Burgundy wine
Film: High Society. “My first
date with my wife was going
to see High Society on the
stage”
Music: he doesn’t like
music; instead, he listens
to podcasts
Gadget: Japanese cooking
knives and a vSpin, which
spins wine to aerate it
before decanting
Watch: Fitbit
Charity:
Greenhouse
Sports
Last holiday:
France in the summer
in the mountains,
although he would
have preferred to have
been skiingWORKING DAY
Luke Ellis is a naturally
early riser, getting up at
6am and heading in to
Man’s head office near the
Thames in the City of
London. He spends his days
in meetings — “every hour,
on the hour, there’s another
meeting” — and “helping
people be better at their
jobs”.
He goes to dinner three or
four times a week but tries
not to answer any emails
after 6.30pm. “Not because
I don’t look at them, but
because I don’t want other
people to think they are
supposed to be working in
the evening.”
DOWNTIME
He walks his cocker spaniel
Bailey, watches rugby
(Wasps is his team) — “I’d
happily watch four games of
rugby in a weekend” — and
spends time with his wife.
“One of the great things
about lockdown was that my
wife and I actually like
spending time together.”THE LIFE OF LUKE ELLIS
spending time together.”A tryer: Wasps rugby,
High Society, Fitbit
and a Range Rover
are among Luke
Ellis’s favourites