Man Sees Outflows Of $2.5B In Q4 2011

Jan 18 2012 | 9:09am ET

Man, the world’s largest hedge fund group, saw an estimated net outflow of $2.5 billion from its funds during the final quarter of 2011.

The firm had assets under management of $58.4 billion as of December 31, 2011, down from $64.5 billion at the end of Q3.

Sales totaled $3.1 billion and redemptions $5.6 billion in 4Q. The quarter also saw the company’s flagship AHL Diversified fund down 7.7%, while GLG recorded positive overall performance.

Man continues to implement cost-cutting measures; in addition to a previously announced $40 million in cuts, the firm will trim an additional $75 million—$50 million in 2012, the balance in 2013. Details on the cuts are to be announced on March 1, but following a Wednesday morning Man conference call, Bloomberg reports the firm will reduce pay and eliminate jobs. Man employed about 1,600 people at the end of March.

Man reports net tangible assets of $1.6 billion, net cash of $600 million and total available liquidity resources of $3.2 billion. Its adjusted pretax profit in the nine months through December 2011 was $257 million, compared to $599 million in the 12 months through March 2011 (the firm has changed its year-end reporting period to December.)

The board plans to pay 7.0 cents-per-share dividend for the final three months of 2011, for a maintained total dividend, pro-rated for the nine-month period, of 16.5 cents per share.

Peter Clarke, Man chief executive, said in a statement: “Trading conditions have been tough for Man in the second half of 2011. Investment performance varied significantly across styles, with market volatility and reduced market liquidity impacting trading opportunities. Although some of our funds performed strongly and sales held up well, we experienced a net outflow in the last two quarters, albeit with reduced redemptions in the final three months.

“Looking ahead, our unique breadth of investment styles positions us well to capture positive performance as markets normal


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