While the rest of the hedge fund industry was bouncing back, Man Group was falling further.
The world’s largest publicly-listed hedge fund manager saw its pre-tax profit fall by more than half and assets under management continued to fall, as its flagship strategy suffered last year. AHL Diversified, which accounts for about half of Man’s US$39.1 billion in assets, lost 17.2% last year as the average hedge fund returned approximately 20%.
“The fourth quarter of the financial year has seen a decline in funds under management, driven principally by the negative performance of AHL in December,” CEO Peter Clarke said. “The catalyst for improved sales will be material positive performance in the managed futures style and from AHL.”
The strategy has returned about 2% this year, but is up about 5% this month.
“This is maybe the catalyst we’re waiting for on sales, but it does need to be sustained,” Clarke said.
Man said its expected profit before taxes is US$530 million, down from $1.24 billion for fiscal year 2009. Net outflows for the full year were about $4.5 billion. Performance fees were down 77% to $80 million, and management fees were down by 50% to $450 million.
Assets under management have continued to decline this year, falling 7.7% since December, due in part to US$1.5 billion in net redemptions.