Peter Clarke, the chief executive of Man Group, blamed investor fears of a credit crunch for its decision to cut as much as $900 million (£438 million) from the price of MF Global, the brokerage unit that it floated in New York yesterday.

The world’s largest hedge fund manager priced shares in MF Global, one of the largest floats of the year, at just $30 each, after potential buyers balked at earlier indications of up to $39.

The discount pricing valued MF Global, formerly known as Man Financial, at $3.8 billion and raised $2.9 billion of proceeds for Man. Less than four weeks ago, Man was aiming for a market value of about $5 billion for the credit and derivatives broker.

Mr Clarke said: “What you have seen since then, particularly in the US, is concerns that started in the sub-prime mortgage market expanding across financial institutions. We were trying to sell into an environment of weakness. The timing might have been better – a week earlier, two weeks later – but the reason for floating was strategic, not financial.”

Investor nerves mean that Man, which used 17 investment banks to manage the float, is likely to struggle to sell the further 9.7 million shares on offer, known as the “greenshoe”.

Mr Clarke said that he was convinced that he had got the best price in the share sale, in which Man offloaded 80 per cent of MF Global. “The strategy was more important than the last dollar on the share price,” he said.

After the sale Kevin Davis, MF Global’s chief executive, stepped down from the Man board. British-born Mr Davis has been locked into MF in a three-year performance-based deal that could be worth $30 million.

Five other directors have also been awarded substantial packages, payable in three years’ time. The value of these deals will have taken a tumble yesterday, but could recover in time.

MF’s shares slid as much as 6.5 per cent in debut trading on the New York Stock Exchange.

Mr Clarke said Man was not a strategic holder and would offload its remaining 20 per cent stake “over time”.

Michael Sanderson, an analyst with 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.”

Man’s London-listed shares closed 2p off at 600½p.

A lawyer heading a $525 million lawsuit against MF yesterday said he had assembled “a compelling case” against it for its alleged help in defrauding investors in the collapsed hedge fund Philadelphia Alternative Asset Management (PAAM) in 2005.

Stephen Harmelin, of Dilworth Paxson, is the receiver trying to recover money lost by PAAM investors.

MF denies the allegations. It has a partial indemnity for most of the risk from Man Group.

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