UK's Man Group says to demerge U.S. brokerage arm

(Adds detail, chief executive quote)

By Laurence Fletcher

LONDON, March 30 (Reuters) - British hedge fund firm Man Group (EMG.L) said on Friday it would demerge its U.S. brokerage unit and list it in New York and also said group pretax profits were likely to be in line with consensus market expectations.

The listing of a majority interest in the unit, Man Financial, will take place in the third quarter of 2007, subject to market conditions remaining favourable, the firm said.

It will be renamed MF Global following the separation, which is subject to shareholder approval, and net proceeds will be returned to shareholders later in the year.

"Separation will allow each business to focus even more effectively on their separate growth strategies and take advantage of the significant business development opportunities in each of their industries," Peter Clarke, who took over as Man's chief executive on Friday, said in a note to the Stock Exchange.

Man Financial's Managing Director Kevin Davis will become CEO of the new group. Chris Smith will be chief operating officer and deputy CEO, while Amy Butte will be chief financial officer. The non-executive chairman will be Alison Carnwath.

Man Group shares rose on Thursday because of market speculation about a possible demerger, traders said.

Man Group also said on Friday that it expected profit before tax and exceptional items for the year to end-March to be in line with consensus market forecasts.

Sales for the year are expected to be $15.9 billion, while funds under management are currently estimated to be over $61 billion, the group said.

In January Man said funds under management were more than $60 billion.

Net management fee income will be 30 percent higher than last year, but net performance fee income will be down around 15 percent, partly as a result of a lower contribution from its AHL fund, the group said.

In the week to March 5 the closely watched AHL futures fund fell 8.2 percent amid a tumble in global stock markets.

((Reporting by Laurence Fletcher, editing by Will Waterman; Reuters Messaging: laurence.fletcher.reuters.com@reuters.net; email: laurence.fletcher@reuters.com; +44 20 7542 7729)) Keywords: MAN TRADING/

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