Man Expects First Inflow In Two Years, AHL Hit By Japan Earthquake

Mar 29 2011 | 1:59pm ET

Buying GLG Partners is proving to be a great investment for the Man Group.

The hedge fund giant said it will see a quarterly net inflow for the first time in more than two years, as sales and performance of GLG products help outweigh outflows and losses suffered by Man's flagship AHL quantitative strategy.

Man said it would enjoy a first-quarter net inflow of US$700 million. That number has been eaten into somewhat by performance losses, including more than US$2 billion in losses attributable to the Japanese earthquake and tsunami earlier this month, but that Man's assets will still rise to US$69 billion by the end of March from $68.6 billion at the end of December.

"The work we have done this year to expand the range of investment styles and solutions we offer our investors, coupled with strong performance, broad distribution and a sound financial base, continue to position us well to meet investor demand globally in the coming quarters," CEO Peter Clarke.

Man said that its full-year pre-tax profit will be about 60% lower, at US$213 million, due mostly to a US$375 million write-down of its multi-manager investment business, which has been displaced by GLG.

The firm's Japan-linked losses were primarily in AHL, which "suffered as the Japan earthquake triggered significant reversals across equity, commodity and currency markets." By contrast, GLG funds, which had been up through February, merely "lost some ground" this month.

Clarke also said that the firm is moving forward with plans to launch an AHL product in Japan next month.

"I don't see this as being a significant shock to our ability to continue to sell product in Japan," he said.


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