Thursday, 23 March 2017
Last updated 16 hours ago
Jul 19 2012 | 11:13am ET
The Man Group has promised its investors a US$0.22 dividend. Morgan Stanley isn't so sure.
A research note from the investment bank said it expects that Man will make the payment. But it warned the world's largest listed hedge fund firm could cut it to as little a 4.5 cents.
Why? Because, Morgan Stanley said, paying out the dividend as planned would cost US$300 million, and Man's net cash position at the end of March, when it announced the dividend, was just US$250 million.
"An assessment of Man as an investment remains fraught with challenges," Morgan Stanley wrote in the note, which was reported by Financial News. The bank said the poor performance of its flagship AHL strategy, distribution problems and high internal costs are all worrisome. What's more, the firm needs to prepare for its structured products business to shrink by more than half. Those portfolios account for about 30% of Man's revenue.