Worldwide worries of an impending credit crunch claimed their first high-profile float victim as Man Group, the hedge fund manager, cut the value of its broking business, MF Global, before its flotation in New York today.

Man priced shares in MF Global at $30 apiece, raising $2.9 billion (£1.4 billion).

This is a full $900 million less than the $3.8 billion it could have raised if it had been able to price shares at the top of the initial range of $36 to $39 set towards the end of June.

Peter Clarke, the chief executive, blamed investor fears about taking exposure to financial institutions for the decision to cut the float price.

"What you have seen since then, particularly in the US, is concerns that started in sub-prime mortgage market expanding across financial institutions. We were trying to sell into an environment of weakness," Mr Clarke said.

"The timing might have been better - a week earlier, two weeks later - but the reason for floating was strategic not financial."

Other sources pointed to The Blackstone Group, the recently floated private equity group, whose shares were trading yesterday below their issue price.

Third Point, an activist fund run by Daniel Loeb, delayed trying to raise $500 million from listing a closed-end investment trust in order to attract more interest from US investors. In the end Third Point successfully raised $525 million.

Michael Sanderson at Dresdner Kleinwort said: "While the reduction in price is not that significant for the Man stock price, it is unhelpful for sentiment given that any reduction in an IPO, whether in price or size, is likely to cause an overreaction in the current markets.

"Despite the negative noise, Man has realised value that had not been recognised adequately in the past via the transaction."

Man's setback with MF Global comes as Ben Bernanke, the Chairman of the US Federal Reserve, acknowledged that concerns about credit quality in the sub-prime mortgage markets in America were spreading to the wider market.

Mr Bernanke pledged to crack down on lax lending by American financial firms.

Two days ago Bear Stearns wrote to investors in two of its hedge funds to inform them that their assets were virtually worthless.

Bear Stearns, which has been forced to extend emergency loans to the funds so they can meet margin calls, acknowledged that one fund had lost all of its equity, and that the other had investments worth only 9 cents in the dollar.

Man indicated at its annual meeting last week that its exposure to the sub-prime mortgage market was minimal and that it had not suffered any losses.

Tempus: Credit bites Man

Economics Editor Gary Duncan on the crunch the markets fear

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