’TIS the season to be jolly and those working in hedge funds, one of the great growth areas of financial services, are probably jollier than most. Worldwide, more than $1,000 billion is now under hedge-fund control.

Imagine it.

I can’t, but I suspect Harvey McGrath can. As chairman of London-based Man Group, one of the world’s biggest hedge-fund companies, he is pretty much the respectable face of the industry over here. He is also the one who cited that trillion-dollar figure to me.

In fact, McGrath is fairly hard to miss right now. This year he took on the chairmanship of London First, the business lobbying group for top companies; he is also trustee of New Philanthropy Capital, a charity that advises the rich on how best to give away their wealth, and Charity Technology Trust, a group that advises charities on how to use technology.

And he is the instigator of Man’s sponsorship of the Man Booker literary award, Britain’s best-known book prize, as well as its tight relationship with the Royal Academy, where it is a regular backer of exhibitions. If that sounds a bit posh, McGrath is also a governor of Tower Hamlets College, a further-education college round the corner from Man’s Thames-side base.

That’s quite a mix. McGrath’s influence seems to grow by the month — just like Man’s shares, which hit an all-time high of £19.60 last week.

“Putting something back is the casual phrase that explains it,” he says, when I ask why he forgoes non-executive directorships to push his not-for-profit interests. “It’s nice to be in a position to do so from the point of view of time and financial capacity.”

Ah yes, that financial capacity. Man’s booming share price makes McGrath, Belfast-born but trained at Chase Manhattan, worth more than £120m, according to some estimates. Man’s chief executive Stanley Fink, paid £11.7m in salary and bonus over the past three years, is similarly rich. In fact, the company is famous for having created one of the biggest bunch of millionaires in London — with an associated inference that McGrath doesn’t like.

“Frankly, by comparison with many in the City we are underpaid,” he says. “My point is a simple one, if you look into investment banks — and you can’t because they are not publicly quoted and hence don’t have the same level of disclosure — you will find lots of millionaires. But Man has traditionally been successful and profitable and its ownership creates wealth for people.”

That’s 53-year-old McGrath’s style: patient, serious, slightly stiff, with only a trace of Ulster left in his accent these days. Sitting six floors up in Man’s modest headquarters on the old Sugar Quay by the Tower of London, he exudes simple common sense. Friendly and square-jawed, with his greying hair pushed back over an impassive face, he makes a point of coming to sit on the same side of the table as me, nothing to hide. Yes, you probably would trust this man with your money.

But then Man Group is a bit different from most hedge-fund operators. A former commodities trader that hived off its agriculture arm in 2000 to concentrate on hedge funds, it has enjoyed stellar growth since then. Originally floated as a combined group at 180p a share in 1994, it is the only large-scale hedge-fund operator to be listed on the FTSE 100. It also offers a lot more than just hedge funds — “a range of investment styles and strategies”, as McGrath puts it.

Even so, its top team now has a reputation for being superbright, mega rich, yet still slightly outside the City establishment. Regulators say they want to scrutinise more thoroughly what goes on in hedge funds, especially inside the small boutique firms. McGrath, formerly chief executive of the combined Man group, positively welcomes the attention.

“Where rules and laws are being broken, regulators should take appropriate action,” he says. “We are regulated by 15 separate agencies across 16 countries and set up to operate to high standards, but we would like to see intelligent regulation and a reasonably light hand, and to that end we have an active dialogue with regulators in many jurisdictions.”

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